Market Summary
Yen Strengthens as BOJ Hike Bets Rise: The yen strengthened for a second consecutive session, reaching as high as 157.54 per dollar and prompting speculation that Japanese authorities could intervene to support the currency. The move followed comments from a BOJ board member raising the possibility of larger or back-to-back interest-rate hikes. Overnight index swaps are now pricing in more than one full 25-basis-point hike at the BOJ’s September meeting, while the probability of a 50-basis-point move remains very low. Strong demand at Japan’s 30-year government bond auction also provided support for the currency.
US Equities Hold Steady as Asian Momentum Fades: Nasdaq 100 futures are down around 0.10% this morning, while the KOSPI is trading 0.29% higher. US equity futures have remained broadly subdued after stocks lost momentum following gains throughout much of the Asian session. S&P 500 futures are now marginally higher, suggesting a relatively cautious start to European and US trading.
Oil Retreats as Iran Risk Premium Eases: Brent crude halted its three-day rally yesterday and has since fallen by around 1.5% to $94.20 a barrel this morning. Oil prices weakened after President Trump said renewed attacks on Iran would likely be short-lived and reiterated his claim that the US controls the Strait of Hormuz. The pullback in crude has eased some of the recent pressure on Treasuries and reduced near-term concerns about energy-driven inflation.
Treasury Yields Edge Lower: The US 10-year Treasury yield slipped by one basis point to around 4.76%, holding on to some of the gains from the previous session as the decline in oil prices eased inflation concerns. The move provides some relief to rate-sensitive assets, although yields remain elevated amid uncertainty about the outlook for inflation and monetary policy.
Gold Rises as Dollar Weakens: XAU/USD has risen 1.12% this morning to around $4,426 an ounce as the dollar softened and Treasury yields edged lower. The decline in yields has reduced the opportunity cost of holding the non-yielding metal, while the weaker dollar has provided an additional tailwind for gold.
Economic Calendar
- Swiss CPI
- Turkey CPI
- Eurozone PPI
- US Initial Jobless Claims
Key Market Moves Today
- S&P 500 Futures: +0.05% (7,680.0)
- US 10-Year Yield: -0.40 bps (4.77%)
- Brent Crude: -1.32% ($94.33)
- Bitcoin: +0.27% ($77,603)
- Spot Gold: +1.12% ($4,426.40)
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