Market Overview
Risk Sentiment Dips in Europe But Euro Holds Steady
Risk sentiment took a mild turn to the downside in European markets today, with DAX pulling back from last week’s solid gains. Investors are watching developments in Germany’s political arena, where Greens have voiced opposition to proposals by CDU’s Friedrich Merz for a sweeping overhaul of debt rules, including...
Dollar Stays Soft as Forex Markets Quiet, US CPI Highlights the Week
Forex markets are trading quietly in the Asian session, remaining within Friday’s range and showing little impetus to move decisively in either direction. Dollar is staying on the back foot, with a lack of substantial buying interest to sustain a meaningful rebound. While last week’s non-farm payroll data helped...
A Multi-Decade Trend Reversal Underway in EUR/USD?
The sharp contrast between Europe’s newfound unity and the ongoing tariff chaos in the US has been a defining theme in the financial markets. Euro’s extraordinary strength last week reflected growing investor confidence in the region’s strategic shift toward fiscal expansion and defense spending. From the formation of the...
Muted Market Response to NFP, Euro Holds Strong While Loonie Struggles
The much-anticipated U.S. non-farm payrolls report came and went without much impact to the markets. With job growth largely in line with forecasts, the data signaled a stable labor market and the balanced outcome offers little guidance to Fed policymakers, who will continue weighing inflation trends, fiscal uncertainties, and...
Risk Aversion Creeps Back as Markets Unconvinced by Trump’s Temporary Tariff Exemptions
Risk sentiment in the forex markets appears to be tilting towards risk aversion in Asian trading, marking a shift from the broad Dollar selloff earlier in the week. Overnight, US President Donald Trump granted temporary tariff exemptions for Canadian and Mexican goods under the USMCA, delaying a full-scale implementation...
Euro Holds Gains After ECB Cut, Yen Rallies on Higher JGB Yields
Euro remained firm following ECB’s decision to cut interest rates, a widely anticipated move. During the subsequent press conference, President Christine Lagarde emphasized a shift to “more evolutionary approach” to policy, now that monetary conditions have become “meaningfully less restrictive.” She also acknowledged the high levels of uncertainty, noting...
Tariff Pause for Automakers Soothes Markets, Euro Stands Tall Ahead of ECB Cut
Risk sentiment is mildly positive in Asian session today, as investors digest the latest developments in US trade policy and Chinese economic measures. Markets welcomed the news that the US has granted a one-month exemption for imports from Mexico and Canada for auto makers. The decision came after US...
Euro and DAX Surge on German Spending Boost, Dollar Struggle Continues after Poor ADP
Investor sentiment in Europe is exceptionally upbeat today, with German stocks leading the rally as DAX surges over 3%, breaking above the 23k mark. Euro also rallies across the board with solid momentum, with help from rise in Germany's benchmark yield, the overall positive sentiment, as well as a...
Euro Stays Strong, While Markets Stabilize on China’s Stimulus and Hopes for Trump’s Tariff Compromise
Despite the steep selloff on Wall Street overnight, sentiment appears to have improved somewhat in Asia. Investors found reasons for optimism as China set a 2025 GDP growth target of around 5% and announced stimulus measures to counter escalating tensions with the U.S. In a notable shift, Beijing raised...
‘Trumpcession’ Concerns Drag Dollar Down, Fed Rate Cut Bets Surge
Dollar fell broadly today, an unusual development in contrast to recent rallies on escalating trade tensions and tariff announcements. Market sentiment soured as traders began to weigh the risks of a “Trumpcession,” a new term coined to describe the potential for US President Donald Trump’s policies to drive the...
Yen Strengthens as Trade War 2.0 Formally Begins, Lifted Further by Trump’s Currency Warning
The latest round of US tariffs on Canada, Mexico, and China officially took effect today, marking the formal start of what many are calling "Trade War 2.0" under US President Donald Trump. Markets had been bracing for impact, and the steep selloff in US stocks overnight confirmed that investors...
“Coalition of the Willing” Fuels Euro Strength, Boosts Defense Outlook
European markets saw a strong rally today, with notable fund inflows driving gains in DAX and Euro. Investor sentiment was boosted by expectations of increased military spending after the announcement of the UK and France-led “Coalition of the Willing” to support Ukraine. FTSE and Sterling also benefited from the...
Bitcoin Roars Back as Trump Plans Strategic Crypto Reserve; Tariffs, Geopolitics, NFP and ECB to Move Markets
Bitcoin led the charge in an otherwise quiet Asian session, rebounding over 20% from last week’s low after a major announcement from US President Donald Trump. The cryptocurrency sector saw dramatic relief from its steep selloff last week, as Trump revealed the creation of a strategic crypto reserve, including...
Safe-Haven Demand Fuels Dollar Rally Amid Trade, Geopolitical Turmoil
Market sentiment took a decisive turn for the worse last week, with risk aversion dominating across asset classes. The combination of deteriorating domestic economic conditions in the US and heightened global uncertainties has fueled concerns that risk appetite could weaken further. Equities faced renewed selling pressure, yields dropped sharply.
Domestically,...
Sentiment Lifted by In-Line PCE Data, But Tariffs Could Limit Optimism
Risk sentiment received a boost in early US trading as January’s PCE inflation data came in line with expectations, lifting hopes that Fed may have room to cut rates in the first half of the year. Both headline and core PCE inflation slowed, adding to expectations that disinflation remains...
Markets Reel Under Trade War Fears, Dollar Gains Traction, Gold Falls
Global stock markets are under heavy selling pressure as risk-off sentiment dominates the final trading day of February. The selloff intensified across major indices, with Japan’s Nikkei plunging -3% and Hong Kong’s Hang Seng Index down -2.8%, following the steep declines in US equities overnight. Investors are increasingly wary...
Dollar Surges as Trump Confirms Tariff Plans, Euro Looks Vulnerable
Dollar surged sharply across the board in early US session trading after US President Donald Trump reinforced his tariff plans, clarifying uncertainties that had lingered in the market. In a Truth Social post, Trump confirmed that the tariffs on Canada and Mexico will "go into effect, as scheduled" on...
Dollar Attempts Another Comeback, Aussie Lags
Dollar traded broadly higher in Asian session, trying to stage a comeback after a failed rally attempt overnight. Renewed focus on tariffs appears to be driving some of the greenback’s momentum. Meanwhile, broader market sentiment is just steady following Nvidia’s strong earnings report, with lingering concerns over competition from...
Dollar Gathers Momentum, Gold Cools Off, Market Jitters Ahead?
Dollar appears to be gathering steam for a stronger, sustainable near-term rebound, although the precise catalyst remains unclear. One contributing factor an undercurrent of risk aversion, which is reflected in the broad selloff in the Australian and New Zealand Dollars. Yet, the overall market picture is mixed, as US...
Dollar Stuck Between Falling Yields and Risk Aversion, Struggles for Direction
Dollar remains stuck in a tug-of-war of conflicting forces. On one side, extended decline in US Treasury yields is pressuring the greenback, while on the other, risk aversion is offering some support.
10-year Treasury yield fell to its lowest level since December, looks on track to test the next Fibonacci...