After all sitting at all time highs yesterday there has been a slight divergence from the S&P and Nasdaq (which both retreated slightly) against Gold, the latter has continued its momentum setting fresh all time highs today of $2,951.
Geopolitical uncertainty has increased demand for haven assets as the US go on the offensive to bring an end to conflict between Russia and Ukraine, European officials are upset about being excluded from US-Russia talks whilst Trump is publicly applying pressure to Zelensky fuelling fears of support being withdrawn. Yesterday's Fed minutes signalled a readiness to keep interest rates steady amid policy uncertainty and stubborn inflation data. Quantitative tightening being slowed or paused was also revealed as in discussion until the governments debt-ceiling drama is resolved. Unwinding of debt has been underway for almost 3 years and was expected to continue until atleast September, this pushed the two-year yield lower 3bps.
In FX, JPY is the strong performer as speculation grows on interest rate rises coming sooner rather than later, inflation data released tomorrow will be closely watched.
On the data front we have Jobless claims out of the US this afternoon followed up by Eurozone consumer confidence at 3pm.
