Insights 
VT 
The USD experienced a decline against most major currencies, with the USDJPY decreasing by 0.83% and the USDCHF by 0.59%. The AUDUSD exceeded its 200-day moving average at 0.6461, reaching 0.64936, while EURUSD and GBPUSD struggled to surpass their 200-hour MAs, although both currencies briefly hovered above. Key technical levels will likely influence new trading day expectations for these pairs.
In economic data, the ISM non-manufacturing index rose to 51.6, influenced by stronger new orders and employment statistics, while prices paid increased to 65.1. Other ISM components saw varied results, with improving new export orders at 48.6 but a contraction in imports at 44.3. Employment, though still contracting, showed improvement, impacting future projections for businesses.
Us Stock Indices Falter
US stock indices faltered, with the S&P index losing 36.29 points, the NASDAQ down by 0.74%, and the Dow slipping 0.24%. European stock movements varied, the German DAX rose by 1.12% and the FTSE 100 by 1.17%. Oil prices fell to $57.13 per barrel despite OPEC+ announcements, while gold increased to $3332.88 and silver to $32.47. US Treasury yields rose, with the 2-year yield at 3.834% and the 30-year yield at 4.839%.
The earlier data provides a clear picture of market sentiment that has started to shift away from the dollar after a spell of relative resilience. The steady drop in USD against most major currencies—particularly the slide of USDJPY and USDCHF—reflects a repricing of risk and fresh appetite for non-dollar positions, likely in response to the latest inflation insights and macro signals.
Take, for instance, the upward movement in the ISM non-manufacturing index. A reading of 51.6 indicates modest expansion, largely fuelled by new orders and employment elements showing strength. Still, some internal data showed softness. Imports contracted further, clocking in at just 44.3, hinting at weakening domestic demand or perhaps a temporary unwinding in inventory restocking. Export orders improving but still under 50 keeps the outlook mixed.
Yields moved up considerably, especially at the long end. A 30-year yield nearing 4.84% suggests changing inflation expectations or concerns about the fiscal environment. This directional movement in yields will challenge risk assets if sustained. Equity markets already reacted. We saw US indices tick down—with the NASDAQ bearing most of the brunt—while European bourses gained, perhaps regaining favour after pricing lags or divergent central bank positioning. It’s not just a knee-jerk reaction; we think it’s a valuation reassessment.
Technical Perspective On Price Action
From a technical perspective, how price reacts around moving averages is proving decisive. With the AUDUSD clearing its 200-day line and sustaining above it, buyers have an opening—as long as momentum doesn’t stall. In contrast, both the euro and sterling touched their respective 200-hour MAs and failed to hold above them. That action speaks louder than commentary. When prices press above such levels yet fall back, it reflects hesitation and a lack of follow-through buying. For us, that typically signals more two-way flows ahead rather than trends.
Oil’s sharp pullback—to as low as $57.13—surprised many, especially following the latest supply commentary. That drop tells us traders are focusing more on weak demand signs than on any coordinated output news. Meanwhile, gold and silver extended their gains. The moves in precious metals, paired with firmer yields, suggest that inflation-adjusted returns are not enough to dent demand for havens, at least not yet. The nuance here is that both metals are strengthening even as nominal rates rise—something that doesn’t traditionally happen over long stretches.
In the current setting, we’ve started to see small awakenings in correlation shifts. For derivative traders, this is when mispricings start to emerge more clearly. Not broad mispricing, but in volatility skew, curve steepeners, and gamma exposures. We are watching these areas closer than usual—as they often present strategies that aren’t directional in nature but can protect or benefit in compressed regimes.
Overall, this is a time to avoid assumptions of continuation. What looks like the start of a trend on Monday may dissolve by Wednesday. Yet, beneath the surface, there’s a pattern forming around defensive assets creeping higher while the dollar’s strength thins out. That’s actionable in well-defined setups if we’re diligent. Volatility isn’t elevated, but there are enough dislocations to allow for structured positions—especially when layered against key technical inflection points.
We remain attentive to shifting yield curves and FX sensitivity to macro beats and misses over the coming days. There’s every reason to believe we’ll be navigating wide price ranges, so risk will need to be managed across both time and direction.
