Wall Street’s main indexes concluded an impressive session with considerable gains, inspired by investor confidence that the U.S. Federal Reserve might be concluding its rate-hiking cycle.

US equities delivered a remarkable performance yesterday, with the S&P CFD making a strong comeback by reclaiming the 200-day moving average. It also retested crucial trend lines and horizontal resistance levels near the 4330 mark.

Treasury yields continue to slide lower following yesterday’s quarterly refunding announcement and the Federal Open Market Committee (FOMC) decision, creating a favorable environment for bond investors.

Gold is currently at a critical support level, with XAUDUSD attempting to break below the 1980 level. The recent decline in both gold and oil prices suggests a gradual unwinding of the risk premium associated with geopolitical tensions.

US Treasury yields pulled back in response to the announcement of lower-than-expected bond issuance for the fourth quarter. This development sparked positive risk sentiment and led to a bid in bonds, resulting in a decrease in bond yields.

Today’s key event in the data calendar is the release of US Personal Consumption Expenditures (PCE) data. While this is the Federal Reserve’s preferred measure of inflation, it typically lacks the same level of market-induced volatility as the Consumer Price Index (CPI).

In the world of finance, we often witness a delicate dance between uncertainty and opportunity. Geopolitical tensions are one of those variables that frequently cast shadows of doubt on the financial landscape. Today, we aim to explore how these tensions create fear in the marketplace and why investors often seek refuge in safe havens to protect their capital.

Risk assets tumbled last night as geopolitical tensions saw more escalations. Talks of attacks on US Navy ships sent geopolitical jitters across markets boosting gold and oil prices.

Today, the financial markets continue to closely monitor the US 10-year Treasury yields as they edge closer to the 5% threshold. This ongoing climb in yields, which reached a new cycle high last night, has added further pressure to risk appetite.

AUDNZD Jumps on Weak NZ CPI Data and Hawkish RBA Minutes

Markets are relatively quiet today as participants digest yesterday’s risk off flows following the slightly better than expected US CPI and a weak 30-year treasury auction. WTI saw a big bounce trading to $85.37 as geopolitical issues remain in focus.

Equity markets continue to bounce following Friday’s NFP report, with ES futures up over 3% from their lows. Bond yields drifted lower yesterday, with US10Y falling back below the 4.70% level.