Today’s session began with the Bank of Japan’s interest rate decision, where rates were left unchanged. Despite the usual anticipation around monetary policy updates, the event didn’t spark much volatility. The yen showed slight strength during the Asian session but has since flattened out, with no significant directional movement.
The bigger story remains the ongoing geopolitical tension between Israel and Iran. While the conflict is far from resolved, recent developments suggest that momentum may be shifting toward a potential ceasefire. Overnight strikes were of lower intensity, and more headlines are surfacing around possible negotiations, including nuclear discussions. These softer developments are helping lift risk sentiment globally.
Equity markets reflect that mood. After a strong Monday, indices saw a brief bearish correction overnight, but heading into the European session, a rebound is underway. Futures are green again, with investors showing signs of cautious optimism.
On the commodity front, gold continues to suffer. After Monday’s negative close, Tuesday opens with another slide in the precious metal. The risk-on tone and retreating safe-haven demand are key drivers here.
Oil remains supported, although price action has cooled. While the trend remains bullish, the pace of gains has moderated, and we’re now seeing slight weakness ahead of the European open. Still, the broader uptrend remains intact, barring any sharp change in geopolitical headlines.
All eyes now turn to the U.S. session, where we await retail sales data. The market expects a monthly drop of 0.5%. Any deviation from this figure could jolt the dollar and add volatility to equities. Until then, the mood leans cautiously positive, but still reactive to headline risk.
Let’s see how it unfolds.