Market Overview - Page 3

The weaker yen increases the risk of market intervention and a tighter BoJ policy, while the divergence in policy between the Fed and the ECB is putting pressure on EURUSD.

A strong dollar and rising supply are weighing on Brent; Japan is preparing to intervene amid a fall in the yen.

Brent has returned to pre-crisis levels, whilst rising supplies and weak demand reinforce bearish sentiment. Barring a new escalation, the decline is likely to continue.

Gold is retreating under pressure from a strengthening dollar and expectations of high Fed interest rates; bears are anticipating a fall to $3,600 before demand returns.

The S&P 500 has come under pressure as investors weigh AI bubble concerns, higher-for-longer Fed interest rates and rising geopolitical risks. While a deeper correction remains possible in the short term, expectations of strong corporate earnings continue to support the longer-term outlook.

The US dollar has regained momentum as escalating tensions in the Middle East revive demand for safe-haven assets. Meanwhile, diverging monetary policy expectations and upcoming eurozone inflation and US labour market data will be key drivers for EURUSD.

Gold is holding steady at $4,000, but the trend remains weak: selling pressure persists, and a recovery is less likely for the time being.

The dollar retreated on the back of weak data and reduced expectations of Fed tightening; the yen and gold have found some respite, but ETF sell-offs are weighing on the metal.

EURUSD is pressured by Fed-ECB policy divergence, but Europe’s resilience and lower oil prices may help the euro recover.

Gold is falling due to the strong dollar, rising yields and expectations of a hawkish Federal Reserve. It is also being weighed down by a sell-off in shares and downward revisions to banks’ forecasts.

•    Geopolitics has stripped the US dollar’s rivals of their key advantages. •    Oil prices may return to pre-conflict levels sooner than expected. The US dollar is extending its lead in the forex market, driven by confidence in the Fed’s.

•    Inflows into US equity funds are heading towards a record high. •    Geopolitical and other fears continue to weigh on the S&P 500. Corporate earnings are rising, the economy is on a solid footing, and interest in AI shows.