The nervous mood that recently dominated global capital markets softened as risk appetite improved. Equities advanced, while sharp declines in gold and silver attracted fresh buyers. The US dollar weakened modestly against most peers, although its broader corrective rebound appears unfinished. Emerging market currencies mostly strengthened, with the Indian rupee standing out after news of a trade agreement with the United States. At the same time, a partial US government shutdown is interrupting key economic data releases, including labor indicators. A major policy development also came from Australia, where the Reserve Bank became the first G10 central bank to raise interest rates, reinforcing expectations of further tightening later in the year.
Asia Pacific Markets
Markets across Asia Pacific rallied strongly, extending the positive tone from Wall Street. Japanese equities surged, with both the Nikkei and Topix rising more than 3%, while South Korea’s Kospi soared nearly 7%. Indian stocks gained over 2.5%, supported by currency strength and trade-related optimism. Even Indonesia’s previously pressured market rebounded sharply. China’s CSI 300 added over 1%. Bond yields in the region moved higher, including Japan and Australia. In currencies, the Australian dollar spiked after the RBA’s rate hike before retreating, while the offshore yuan reached new lows against the dollar as China’s central bank continued to guide the fixing lower.
European Markets
European trading was steadier, following gains from the prior session. The Stoxx 600 edged higher after posting a solid advance the day before, while regional bond yields ticked up slightly. In currency markets, the euro struggled to hold rebounds and remained under pressure, with technical signals pointing to the possibility of a deeper correction. Sterling also retreated after failing to sustain a move above recent highs, as momentum indicators suggested further downside risk. Inflation data added context, with France reporting softer price growth ahead of the broader eurozone CPI release, following similar reports earlier from Germany and Spain.
American Markets
US equity futures pointed to mild gains after a strong prior session, reflecting easing market anxiety. Treasury yields were firm, with the 10-year note holding just below recent highs. Commodities rebounded sharply: gold rose for the first time in several sessions after a steep drop, while silver posted an even stronger recovery. Oil prices also stabilized after recent losses. In currencies, the dollar continued to correct against several majors and emerging market peers, including notable moves in the Mexican peso and Indian rupee. Meanwhile, the partial government shutdown delayed key data, shifting attention to auto sales and upcoming central bank decisions.