ING Comments on Euro, Swiss Franc, Sterling

06:58 AM EDT, 09/10/2025 (MT Newswires) -- Uncertainty in French politics has seen the OAT-Bund 10-year government spread settle above 80bps, said ING.

French 10-year government borrowing costs now match those of Italy. The bank noted it cannot rule out a further sell-off in French debt as France looks for a new government, but it doesn't see this as a euro (EUR) crisis.

ING thinks the pro-global risk/soft US dollar (USD) environment remains the dominant theme for EUR/USD.

The eurozone data calendar is quiet ahead of Thursday's European Central Bank policy meeting. There is, however, the State of the European Union address from Commission President Ursula Von der Leyen. No doubt the focus will be on military strength.

The bank expects EUR/USD to continue trading around the 1.1700 area -- though it doesn't rule out a very temporary dip to the 1.1630/50 area later this week.

Elsewhere in Europe, Swiss central bank (SNB) Governor Martin Schlegel speaks at a banking conference at 1345 CET on Wednesday. Presumably, he'll adopt the same tone he used in a magazine interview on Monday, which ING saw as Swiss franc (CHF) bullish.

After all the gyrations in bond markets last week and predictions that the Unite Kingdom would need an International Monetary Fun bailout, conditions have settled down. Gilt auctions seem to have been going well, showing that the U.K. has no problem servicing its debt if the price is right, added the bank. Wednesday sees four billion pounds of six-year Gilts auctioned, for reference.

EUR/GBP remains well contained in a 0.86-0.87 range. Sterling's (GBP) high-yield status makes it an expensive sell, and unless there is some imminent bad news expected, sterling can hold its own at these levels, according to ING. Next week's Bank of England rate meeting should, in theory, keep sterling supported unless upcoming jobs and consumer price index releases very much surprise on the downside.

The bank is still "happy" with its calls that EUR/GBP ends the year near 0.87 and GBP/USD near 1.38 as the US dollar bear trend dominates.

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