Tuesday kicks off with heightened volatility, especially as the European session opens. The spotlight this morning is on the Japanese Yen, which experienced a sharp two-phase move overnight. Initially, the Yen strengthened following hawkish comments from Bank of Japan Governor Ueda, who hinted at potential rate hikes. However, this momentum was short-lived. As broader risk-on sentiment swept the markets, the Yen sharply reversed and is now the weakest currency across the board.
This risk-on sentiment is clearly visible across assets. Gold is plunging, down significantly in early trading, reflecting capital rotation out of safe havens. Other precious metals—including silver, platinum, and palladium—are also under pressure. Copper is sliding as well.
On the flip side, equity futures are climbing, showing optimism in stocks. The green start to the day suggests buyers are still active, carrying over the momentum from Monday’s gains.
In the currency markets, alongside the Yen’s decline, we see weakness in the Australian Dollar and Swiss Franc. The US Dollar is gaining this morning in a short-term recovery move, although it's worth noting that the dollar remains the weakest major currency of 2025 so far.
Oil remains in a sideways trend, not participating in the broader moves and still under lingering bearish pressure.
Macro calendar highlights today:
This sets up an intriguing trading day with clear sentiment trends forming early. Keep an eye on US data for potential volatility spikes later in the day.