The US dollar traded with a softer tone against most major and emerging-market currencies, although the Japanese yen remained an exception. The greenback advanced toward the 40-year peak reached earlier this month, touching levels near JPY162.70 after climbing to a seven-day high. Oil prices stayed supported as efforts to reduce tensions in the Middle East continued to face obstacles. Market sentiment improved after reports indicated that Chinese authorities were encouraging support for domestic equities through state-backed investors. Meanwhile, fresh trade friction emerged after Washington threatened 50% tariffs on selected Canadian goods, though the Canadian dollar later recovered and moved modestly higher.

Asia Pacific Markets

Asian equity markets rebounded strongly after recent weakness. Reports that large state-backed investors, insurers, and asset managers were supporting Chinese shares helped lift the CSI 300 by more than 3%. Japan’s Nikkei 225 gained 3.25%, while South Korea’s Kospi advanced 3.5% and Taiwan’s Taiex surged 4.2%. Currency markets were mixed across the region. The offshore yuan strengthened further, with the US dollar falling to a new monthly low near CNH6.7635. The Indian rupee posted its largest gain in roughly two weeks as steadier oil prices eased pressure after the currency had approached record lows. Regional markets were also encouraged by bargain hunting following the recent technology-sector decline.

European Markets

European developments were dominated by the UK and Germany. Sterling remained under pressure after retreating from last week’s highs, while softer employment figures limited any recovery. Investors also focused on UK public finances after data showed government borrowing exceeded forecasts during the first three months of the fiscal year, highlighting limited room for new fiscal initiatives. In Germany, the ZEW investor survey pointed to improving sentiment, with expectations reaching their strongest level since the Middle East conflict began. European equities also stabilized, with the Stoxx 600 advancing about 0.45% after the previous session’s decline. Bond markets remained cautious, especially after the recent rise in UK gilt yields.

American Markets

North American markets were influenced by trade developments, economic data, and commodity prices. The Canadian dollar recovered after an initial decline triggered by US tariff threats, as the proposed measures are not scheduled to take effect for 30 days. In Mexico, the peso extended its recent strength, helping it remain among the best-performing emerging-market currencies. US equity futures moved higher, with Nasdaq futures rising around 1.3% and S&P 500 futures gaining roughly 0.5%. Treasury yields stayed elevated after the 10-year yield briefly moved above 4.60%. Gold rebounded toward $4,084, silver extended its recovery toward $59.25, and oil prices remained volatile as markets weighed ceasefire discussions against ongoing uncertainty surrounding the Middle East conflict.