Daily Market Wrap
“ Markets shifted into a more cautious tone as a sharp rally in oil revived inflation concerns ahead of Wednesday’s U.S. CPI report. Higher energy prices pushed Treasury yields higher, while gold extended its advance and equities remained supported by strong technology-sector sentiment,” said Amir Amidian, Director of the InterStellar Group Research Center.
Macro & Rates
U.S. Treasury yields continued to move higher, with the 10-year yield rising 6bps to 4.71% on Monday. Asian government bonds followed Treasuries lower today as markets reassessed the inflation outlook following oil’s four-day rally.The recent softer-than-expected U.S. jobs data had reduced expectations for an immediate Fed rate hike, but the renewed rise in energy prices is complicating the picture. Wednesday’s CPI report will therefore be closely watched for confirmation of whether inflation continues to moderate or whether higher oil prices are beginning to create renewed price pressure.The Dollar maintained its recent gains, while the Japanese Yen remained under pressure around 159.25 per Dollar. The Yen’s 1% decline on Monday erased roughly half of its recent intervention-driven recovery, keeping markets alert to the possibility of further action from Japanese authorities.
Commodities
Oil remains the key macro driver. Brent crude held around $87.75, following a 5% jump on Monday and extending a four-day rally.The latest move higher came as Trump issued new demands toward Iran, further clouding prospects for an agreement to reopen the Strait of Hormuz. A prolonged disruption would keep the energy risk premium elevated and could feed directly into inflation expectations.Gold climbed above $4,400/oz for the first time in this move, advancing for a third consecutive day. The break above its 100-day moving average triggered additional technical buying, while the combination of geopolitical uncertainty and changing rate expectations continues to support demand for precious metals. Silver and platinum also moved higher.
Equities
Risk appetite remained relatively strong despite the pressure in fixed income. Technology stocks continued to outperform, with South Korea’s Kospi gaining 1.2% and Samsung rising around 5%.The resilience of technology equities suggests that investors have not yet significantly reduced risk exposure. However, the sustainability of the rally will increasingly depend on the inflation and interest-rate outlook following Wednesday’s CPI release.
Central Banks
The Reserve Bank of Australia left its key interest rate unchanged, with policymakers betting that rising unemployment and weakness in the property market will eventually cool economic activity and inflation.The decision highlights the broader challenge facing central banks: balancing weakening economic activity against inflationary pressure that could be reinforced by higher energy prices.FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.
