Headlines:
Markets:
- AUD leads, USD lags on the day
- European equities higher; S&P 500 futures up 0.7%
- US 10-year yields down 0.5 bps to 4.589%
- Gold up 0.2% to $2,642.93
- WTI crude up 0.5% to $74.36
- Bitcoin up 1.3% to $99,503
It’s not a good day for dollar bulls as they are getting squeezed to start the new week. The greenback was already slightly softer early on in Europe before a report saying that Trump’s aides might be considering a softer stance on tariffs helped to stir up a risk rally in markets.
The dollar stumbled as such with EUR/USD rising from 1.0340 to 1.0400 while USD/JPY fell from 157.80 to 156.85 currently. It’s a broad based move with GBP/USD also seen up 1% to 1.2540 and USD/CAD down 0.9% to 1.4315 on the day.
In response to the headlines, equities are also rallying with S&P 500 futures climbing by 0.7%. European indices are also posting strong gains with the DAX up over 1% and CAC 40 up over 2%. In the bond market, yields fell off from earlier highs with 10-year Treasury yields falling from 4.63% to 4.59% now.
It’s a case of squeeze the dollar, buy everything else in this instance.
And in the commodities space, gold turned losses into gains as it also catches a bounce off its 100-day moving average to be up 0.3% to around $2,643 now. Silver is keeping its strong start to the year, as it is up over 2% to $30.23 currently.
The question now is, will we hear any denials from Trump on this supposedly softer take on tariffs? He’s been threatening a big game, so it will be hard to imagine him suddenly turning soft when he takes office later this month.