The US dollar opened the new week and month unevenly, extending part of last week’s advance before slipping into consolidation. It retained gains versus the Canadian dollar, Norwegian krone and Swiss franc, while trading nearly flat against the yen. Emerging market currencies showed no clear direction, with Asian units mostly weaker, except for the Indian rupee, which strengthened after a budget that lifted yields. Geopolitical tensions eased as dialogue between the US and Iran resumed, pushing oil prices sharply lower. Precious metals remained under pressure, with high volatility persisting despite some price stabilization. Equity market turbulence from last week continued into the new trading period.

Asia Pacific Markets

Asia Pacific equities came under heavy pressure, with most major markets posting declines exceeding one percent. South Korea’s Kospi led losses, falling more than five percent, while India stood out with gains of around one percent. In currency markets, the Japanese yen weakened as the dollar briefly pushed higher before easing back. Chinese data disappointed, with official manufacturing and non-manufacturing PMIs slipping below the expansion threshold, while the composite index also fell. Bond yields in Japan were mixed, with the 10-year edging lower and longer maturities firmer. Australia’s manufacturing PMI stayed in expansion territory, as markets weighed the likelihood of a near-term rate hike.

European Markets

European markets showed relative stability compared with Asia, as the Stoxx 600 traded little changed. The euro weakened ahead of the weekend, falling to multi-day lows before stabilizing, though downside risks remained. Sterling also softened, staying within a wide recent range as traders monitored key technical levels. European bond yields were mostly firmer, with the notable exception of UK Gilts, which declined modestly. Final manufacturing PMI data confirmed slight improvement across the euro area, though several major economies remained below the expansion threshold. Germany additionally reported a small decline in December retail sales, highlighting uneven regional momentum.

American Markets

US equity futures pointed lower, with Nasdaq and S&P 500 contracts both down more than one percent, extending recent volatility. Treasury yields eased slightly, with the 10-year slipping below 4.22%. In commodities, gold and silver rebounded from sharp sell-offs but remained volatile, while oil prices dropped to multi-day lows amid easing geopolitical risks and steady OPEC+ output plans. The US dollar strengthened against the Canadian dollar after a bullish reversal, even as Canada’s economic data stayed mixed. Investor attention turned toward upcoming US manufacturing data and a busy week of labor market reports, including nonfarm payrolls.