SILVER TECHS: Support At The 50-Day EMA Remains Intact For Now

German VDMA machinery orders were weak in August, with a decline of 7% Y/Y, with domestic orders down 5% and foreign orders down 8%. "There was a very clear divergence: while orders from eurozone partner countries increased by 12 percent, orders from non-eurozone countries fell by 15 percent. [...] US tariffs are increasingly leaving their mark", VDMA concludes.

• On a longer-term comparison: "In the less volatile three-month period from June to August 2025, companies recorded a total decline in orders of 2 percent in real terms."
• The German Final September Manufacturing PMI was also released this morning, drawing a rather negative picture: "Expectations slip to nine-month low as new orders post renewed decline".
• Full German factory orders data for the month of August is scheduled for release next Tuesday, October 7.

The EUR 10s30s swaps curve has consolidated in the low 20s in recent sessions after registering a cycle closing high of 28.2bp in early September.

• Dutch pension flows remain front and centre when it comes to long end swap-related discussions.
• While the Dutch move to defined contribution from defined benefit pension plans continues to present medium- to long-term steepening risks for the long end, the risks are not overwhelmingly skewed in that direction in the more immediate term.
• Commerzbank note that the recent pullback from multi-year highs on the EUR 10s30s curve gives rise “to speculation of steepener unwinds ahead of year-end as the transition to the defined contribution is not happening as quickly as some speculators may have thought”.

In an interview with Nikkei, Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi says that "It is important for the government and the Bank of Japan to share the same overall direction", and that "the government's economic policy and the Bank of Japan's monetary policy will work together to realise a virtuous cycle in the economy." Koizumi is viewed as the strong frontrunner for the leadership of the governing Liberal Democratic Party (LDP) ahead of the 4 October election. 

• Should he win the contest and be elected as PM, Koizumi says that he will look to pass the supplementary budget for FY2025 as soon as possible, adding, "The public is waiting for us to deliver results quickly on measures to combat rising prices".
• All candidates have faced questions on which parties they would be willing to work with, given the LDP-Komeito coalition is short of a majority in both chambers of the National Diet. The libertarian federalist Japan Innovation Party (Ishin) are seen as the most likely partners for a Koizumi-led LDP.
• This led to questions on Ishin's plan for a second capital city that would function as "an economic centre comparable to the Tokyo area that can function as the capital in the event that Tokyo becomes unable to do so."
• Ishin co-leader, Osaka Governor Hirofumi Yoshimura, said it would be a "key issue" to discuss with the new LDP president. Koizumi said that he agreed on the need for a more decentralised governing structure, but he would need to see the details of the plan first.