As London/European traders head home, the major continental indices are closing higher, with Italy and Germany leading the gains. The UK FTSE 100 is the exception, moving lower as weakness in HSBC weighs on sentiment. Meanwhile, the French bond market continues to flash caution, with yields rising despite the recovery in French equities.Italy and Germany lead. HSBC weighs on the FTSEGermany’s DAX gained 195.79 points, or 0.77%, to 25,606.64, while France’s CAC 40 rose 39.82 points, or 0.51%, to 7,887.15. Spain’s Ibex advanced 127.30 points, or 0.67%, to 19,160.60, and Italy’s FTSE MIB led the group with a 441.14-point gain, or 0.90%, to 49,627.94. In contrast, the UK FTSE 100 fell 80.77 points, or 0.75%, to 10,686.55.HSBC was a drag after disappointing revenue sent its shares down nearly 7% earlier in the session. Elsewhere, Novartis raised its earnings outlook, while BE Semiconductor Industries benefited from news that Applied Materials increased its stake to 20%. Investors are also preparing for the Fed decision Wednesday and the ECB decision Thursday. www.reuters.comFrench confidence sinks as the bond spread widensFrance remains a concern. Consumer confidence fell five points to 80, its lowest reading since June 2013, as protests against government economic policies continued. That leaves the recovery in French stocks taking place against a difficult domestic backdrop. www.aol.comThe bond market reflects that unease. France’s benchmark 10-year yield rose 2.4 basis points to 4.927%, while Germany’s fell 0.9 basis point to 3.361%. That puts the French premium over Germany at 156.6 basis points, widening another 3.3 basis points on the day. Equity buyers are making a play, but the widening spread suggests investors still want additional compensation to hold French debt.Elsewhere, Italy’s 10-year yield increased 1.4 basis points to 4.514%, Spain’s slipped 0.3 basis point to 4.005%, and the UK yield was little changed at 5.353%, up 0.1 basis point.US orders and confidence improve, but consumers remain cautiousIn the US, the economic releases painted a mixed picture, with manufacturing orders and consumer confidence improving while housing activity remained softer.September durable goods orders rose 1.8%, following a 0.1% increase in August. Transportation led the advance with a 4.6% gain, but orders excluding transportation also increased 0.5%. The underlying increase suggests the improvement extended beyond the volatile transportation category, although that category supplied most of the headline gain. www.census.govConsumer confidence also rebounded. The Conference Board index increased to 91.7 from an upwardly revised 84.2, with improvements in both current conditions and expectations. However, the details were more restrained: consumers planned less spending on services and durable goods, while inflation expectations remained elevated at 5.8%. Confidence improved, but households are still watching their purchasing power. www.conference-board.orgHousing sales soften while prices continue higherSeptember new home sales slipped 0.6% to a 676,000 annualized pace, from 680,000 in August, and were 5.3% below a year earlier. Inventory declined to 476,000 homes, but supply remained elevated at 8.4 months. Builders have fewer homes available than a month ago, but the sales pace is still leaving buyers with considerable choice.Meanwhile, the FHFA reported that home prices increased 0.3% in August and 2.4% year over year. July’s monthly gain was revised down to 0.2% from 0.3%. Prices are still moving higher nationally, adding to the affordability challenge even as sales remain subdued.US 10-year yield presses against the 5% barometerUS Treasury yields were higher across the curve in the supplied snapshot, with the larger increases at the short end. The 2-year yield rose 2.38 basis points to 4.7348%, the 5-year increased 1.65 basis points to 4.8405%, and the 10-year edged up 0.86 basis point to 4.9946%. The 30-year yield rose 0.72 basis point to 5.3082%.That leaves the 10-year just below the 5.00% barometer as traders await the Fed. A sustained move above that level would keep borrowing costs and equity valuations firmly in focus.Dollar gains across the major currenciesThe dollar was also firmer across the major currencies. EURUSD fell 0.30% to 1.1139, while GBPUSD declined 0.24% to 1.3307. USDJPY rose 0.23% to 157.86, USDCHF advanced 0.19% to 0.8287, and USDCAD increased 0.26% to 1.4047.The AUDUSD and NZDUSD were also lower, trading at 0.7029 and 0.5685, respectively. The gains across the board point to broad dollar demand heading into the Fed decision.Oil tests $100 while gold finds buyersIn commodities, crude oil moved lower while metals found buyers. The December crude contract fell $1.49, or 1.46%, to $100.27. The $100 level is the nearby psychological barometer. Staying below that level would add to the pullback; holding above it would leave sellers with more work to do.Gold gained despite the firmer dollar and higher Treasury yields. Spot gold rose $43.51, or 1.08%, to $4,060.70, while silver advanced 0.88% to $54.41 and copper climbed 1.68% to $6.6520. Bitcoin also edged higher, gaining 0.49% to $80,400, keeping the price close to the familiar $80,000 pivot.Fed and technology earnings are the next testsAttention now turns to the central banks and the next round of technology earnings. Microsoft and Alphabet report Wednesday, followed by Amazon Thursday, putting the returns from heavy AI spending back under scrutiny. For traders, the question is whether the improving equity tone can build momentum with US yields still pressing against 5% This article was written by Greg Michalowski at investinglive.com.