Headlines:
Markets:
- AUD leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.5%
- US 10-year yields down 0.8 bps to 4.245%
- Gold down 0.1% to $4,829.81
- WTI crude oil down 1.7% to $59.61
- Bitcoin down 0.3% to $89,924
It looks like it’s not a case of “all or nothing” but rather “all for nothing”. After the heavy threats on Greenland and Europe, Trump walked back on all of that yesterday and we’re seeing a perceived calm filter through to European trading today.
Still, there are things yet to be made clear. Trump’s discussion for a “framework deal” only involved NATO secretary general Rutte. Denmark and Greenland were not in the picture. And Trump is continuing to reaffirm that the US will have “total access” to Greenland, something which doesn’t tie up with the supposed “pockets of lands” that was framed.
That said, Trump says the details are being worked out. So, we’ll just have to wait and see on what all this really means.
In any case, the most important takeaway for markets right now is that Trump is not willing to bring down the stock market. And that means no major escalations and tariffs are taken off the table, as well as any potential forceful action.
That’s seeing a bit of a risk relief for equities but not so much the dollar. The greenback looks to be reeling from a confidence hit amid continued erratic US administrative policies and that’s something to be wary about.
EUR/USD is up 0.2% to test waters just above 1.1700 with large option expiries at the figure level. Meanwhile, USD/CHF continues to drop in a fall to 0.7925 – down 0.4% on the day. AUD/USD is the lead gainer with the pair up 0.7% to just above 0.6800 after a strong Australian jobs report earlier in the day here.
In the equities space, European indices are bouncing back after the drop yesterday in having to capture the Wall Street rebound as well as the better mood today. Most major benchmark indices in the region are up over 1% with S&P 500 futures up 0.5% currenlty.
Global bond markets remain calm and steady as well in response. However, all eyes in this space remains on Japan after the intense rout from earlier this week. That has stalled for now but the pressure is still on with the Japanese yen also feeling the pinch. USD/JPY is up 0.2% to 158.63 on the day despite a softer dollar.
As for commodities, precious metals have pulled back from the extreme highs yesterday. However, the pullback isn’t anything too alarming and perhaps that speaks to how broader markets are feeling right now. There is a sense that you just never know what Trump might pull out of his hat next and as mentioned above, it’s not exactly over with regards to Greenland yet as well.
Gold is down just 0.1% today to $4,831 in keeping above the $4,800 mark while silver is up 0.6% to $93.67 after the low yesterday touched $90.33. Resillient.
