The recovery in risk sentiment is continuing as we approach a flurry of US data and earnings later this week. Gold (XAU) continues to trade around $3,300 (about $200 off the peak), and US equities have posted a five-day winning streak—the longest positive run since November. Yesterday’s modest gain came on the back of easing expectations for auto tariffs. Asian stocks are also back above both the 50- and 200-day moving averages, supported by continued optimism.
Out of Canada, Mark Carney has secured a narrow victory, as the Liberal Party staged a turnaround after former Prime Minister Justin Trudeau appeared poised to end the party’s dominance just four months ago. However, the margin of victory may fall just short of a full majority, which could make governing more complex. The CAD weakened on the news. Carney has publicly stated he will stand up to the US, with his initial focus on getting to the negotiating table alongside the US’s major trade partners—excluding China.
Treasury Secretary Bessent continues to publicly pressure China to take the initiative in de-escalating trade tensions, noting that China, with its large surplus, bears responsibility for making the first move.
It is also a public holiday in Japan today—Showa Day—marking the start of Golden Week, which includes several holidays over the coming days.
