Market Overview

The US equity market is holding at record highs, supported by a strong economy and demand for AI, despite rising yields and the risks of Fed policy tightening.

The dollar is strengthening as rising yields and oil prices bolster it, while vulnerabilities in the euro and yen add to its advantage ahead of US jobs data.

USDJPY is retreating amid falling yields and a weaker dollar, but the US dollar remains strong on expectations of further Fed tightening.

The dollar is strengthening on expectations of a Fed rate hike and rising yields, whilst the yen’s weakness maintains the risk of intervention at 160 on USDJPY.

Gold is consolidating at $4,250–4,400 as dollar pressure is offset by Asian demand, ETF buying, and central bank buying.

The dollar has risen for 7 sessions (+2%). Political risks weigh on the euro and pound: France’s debt may top 120% of GDP, and the UK budget spooks markets. The yen slips on the BoJ’s lack of urgency.

The dollar is rising in tandem with oil prices: inflation risks and the prospect of Fed tightening are supporting the USD, whilst political risks in Germany are weighing on the euro.

The S&P 500 stays resilient as a strong economy and solid profits offset Fed tightening, though oil-driven stagflation risks could trigger a correction.

The euro is finding support from reassessments of interest rates by the Fed and the ECB, while the yen's return as a funding currency is helping EURUSD hold its ground.

The dollar is gaining on the hawkish Fed, slower BoE, and BoJ; USDJPY is nearing the zone where intervention risks rise.

The Fed has raised rates and strengthened the dollar; the Bank of England may respond with a hawkish signal, supporting the pound.

The Fed may begin a hiking cycle; the dollar will only gain ground if the signals are more hawkish; otherwise, a correction is likely.