The US dollar regained momentum after a brief period of consolidation, supported by rising US Treasury yields and renewed demand for the currency. Despite advances made by the US administration on several geopolitical and economic fronts, the dollar’s performance remained primarily tied to interest-rate dynamics. Meanwhile, tensions in the Middle East intensified as additional vessels were reportedly attacked in the Strait of Hormuz, pushing oil prices higher. Long-dated US bond yields climbed to fresh multi-year highs even as the Treasury prepared to increase buyback operations. Currency markets also continued to focus on Japan, where expectations for a Bank of Japan rate increase remain elevated, yet the yen stayed under pressure with the dollar holding above JPY160.

Asia Pacific Markets

Markets across Asia-Pacific reflected a mix of economic resilience and financial-market caution. Japan reported strong corporate earnings growth and firmer capital expenditure figures, while manufacturing activity eased slightly from preliminary estimates. The offshore yuan traded in a relatively narrow range as investors assessed prospects for a future extension of the US-China tariff truce. India’s rupee strengthened to its best level since early July despite rising crude oil prices, aided by continued central bank activity. Australia confirmed modest manufacturing expansion but reported a wider current-account deficit, while investors prepared for upcoming GDP data. Regional bond yields moved higher, with Japan’s 10-year government bond yield settling above 3%.

European Markets

European financial markets faced renewed pressure as rising global yields and geopolitical uncertainty weighed on sentiment. The euro fluctuated within a relatively tight range, briefly reaching session highs before retreating in European trading. Regional equities weakened, with the Stoxx 600 on track for its largest decline since late July. Government bond yields across the continent continued to rise, following the global move higher in fixed-income markets. Economic data showed eurozone manufacturing activity remained at its strongest level in more than four years despite a minor downward revision. Inflation accelerated in August, while unemployment held steady. In the UK, manufacturing growth remained positive, although mortgage lending and approvals softened.

American Markets

North American markets were shaped by higher yields, weaker equity sentiment, and anticipation of key economic reports. US stock index futures pointed lower after major benchmarks started the month on a weak footing. The rise in Treasury yields continued, with the 10-year note approaching 4.80% and the 30-year yield moving above 5.27%. Gold extended its recent decline, recording consecutive losses for the first time in more than a month, while silver also moved lower. Oil prices climbed sharply as Middle East hostilities intensified, lifting October WTI above recent highs. Investors also monitored US manufacturing indicators, job openings, construction spending, and vehicle sales data, while Canada prepared for a busy week featuring a central bank meeting, trade figures, and employment statistics.