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.

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.

The Bank of Japan is poised for another revision of its yield curve control (YCC) framework in response to emerging economic challenges. In a critical monetary policy meeting scheduled for Tuesday, the central bank is considering allowing the yields on 10-year Japanese government bonds to exceed the 1% mark.

Recent economic data has been mixed, with better jobs data but a big surprise move lower in inflation last week.

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.

Economic Calendar: UK Jobs & PMI Data, AUD CPI Data, German and French Flash PMI Data, ECB Policy Decision.

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.

AUDNZD Jumps on Weak NZ CPI Data and Hawkish RBA Minutes

Crude oil prices have managed to sustain the gains observed last Friday, with market attention keenly focused on the unfolding events in the Middle East.

Equities continued their march higher today, with the S&P 500 trading at its highest levels in three weeks. The move higher happened despite a big beat in US PPI data yesterday, which showed that inflation is still stubbornly high.

If we see a big miss in the PPI data today, we could look for downside opportunities in the USD versus the AUD, EUR, and XAU (gold), as well as possible long opportunities in equities.

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.