Hello traders, welcome to Monday. A new week brings fresh trading opportunities, and markets are opening with a cautious rebound after a worrying Friday close.
Futures are in the green, suggesting a modest attempt at recovery. After Friday's broad risk-off session and a string of bearish daily candles, today’s bounce is a welcome change. Whether it holds will likely set the tone for the week — if bulls can stabilize price action, confidence may return. But if buyers fade quickly, the risk of a deeper bearish correction increases.
In currencies, the early focus is on the Japanese yen, which opened the week significantly stronger following political tensions out of Japan. Over the weekend, reports emerged that Japan’s ruling coalition is expected to lose control of the upper house in Sunday’s election — triggering a wave of risk aversion and JPY buying in early trade.
However, as we approach the European session, the yen is giving back some of those gains, suggesting the initial panic may be fading — or at least being repriced.
Elsewhere, the New Zealand dollar is under pressure after a softer-than-expected CPI reading. The inflation data came in below forecasts, raising questions about the RBNZ's next move and weighing heavily on NZD to start the week.
Aside from that, the calendar is light today. No major data releases are expected beyond New Zealand's CPI, leaving markets to trade mostly on technicals, headlines, and sentiment until Tuesday.
In commodities, metals are off to a strong start, led by a rebound in gold and silver, both of which are pushing higher after a soft finish last week. The mood here is cautiously optimistic, with bulls trying to regain control.
Oil, however, is mixed to weak. After a brutal selloff on Friday, especially in the second half of the day, crude is struggling to find support. Early signs suggest another down day could be ahead if buyers don’t step in soon.
It’s a quiet Monday in terms of scheduled events, but given the lingering geopolitical risks and technical fragility across asset classes, volatility may not be far away.