Markets remain relatively quiet following last week's flurry of positive news. The rally in equities has paused, but only after significant gains during the recent seven-day run. China has suspended curbs on exports of rare earths and other military-use goods and technologies as part of an agreement in the tariff de-escalation with the US—a further sign that this relief is ongoing.
Most of the current market excitement around the Trump administration is in FX, following yesterday’s headlines about US–Korea currency talks. The US appears to be shifting toward favoring a weaker dollar to support exports and facilitate trade deals. This was a recurring theme during Trump’s first term, and investors are likely to remain cautious of further USD weakness.
Expectations for fewer rate cuts have continued to rise. The US 10-year yield is at its highest level in a month, as markets expect the Fed to remain cautious—maintaining flexibility to react to changes in the landscape. The recent recovery has reduced pressure for immediate easing.
Gold (XAU), currently at $3,145, has broken below the 50-day moving average for the first time since January. The 100-day moving average sits at $2,971, and XAU hasn't sustained a fall below that level since 2023. If the recent sell-off continues, this could become a key level to watch—especially after such strong performance over the past 18 months.
