The dollar had the stronger hand to start the trading week. EURUSD traded to a new low for the year, while USDJPY moved above its 200-day moving average and stayed above. Oil advanced, precious metals retreated, and U.S. stocks finished mixed.
It was a holiday session with an important piece missing: the U.S. cash Treasury market was closed. There was no fresh bond-market reaction to the higher oil price or hawkish comments from Cleveland Fed President Beth Hammack. That reaction will have to wait until Tuesday.
Dollar higher across the board
In the supplied late-session snapshot, the dollar was higher against all seven major currencies. Its largest gain was against the Swiss franc, while its smallest gain was against the Canadian dollar.
EURUSD: 1.1155, −0.41%.
USDJPY: 158.64, +0.21%.
GBPUSD: 1.3203, −0.21%.
USDCHF: 0.8345, +0.53%.
USDCAD: 1.4280, +0.18%.
AUDUSD: 0.6955, −0.39%.
NZDUSD: 0.5584, −0.34%.
EURUSD broke below last week’s low at 1.11603. The buyers had their shot earlier when the rally reached 1.1217 near the falling 100-hour moving average. They could not get above that ceiling, and sellers pushed to fresh lows.
The next downside target is 1.11296, the 50% midpoint of the rally from January 2025 to January 2026. Holding below the 100-hour moving average near 1.12056 keeps sellers in control.
For USDJPY, the 200-day moving average at 158.54 is the nearby barometer. Stay above, and the bias remains more bullish. Move back below, and today’s break loses some of its strength. Can the buyers keep the momentum going in the new trading day?
Treasury market closed
The following are Friday’s closing yields, carried into Monday’s holiday session:
2-year: 4.7911%.
5-year: 5.0211%.
10-year: 5.2421%.
30-year: 5.6001%.
There is no Monday cash-market basis-point change to report. Elevated borrowing costs remain part of the backdrop, but Tuesday will provide the first fresh Treasury response to Monday’s developments.
U.S. stocks close mixed
The Dow advanced, while the broader indices finished lower. The Nasdaq 100 led the declines.
Dow industrial average: 51,856.18, +196.00 points, +0.38%.
S&P 500: 7,807.24, −4.30 points, −0.06%.
Nasdaq Composite: 27,245.90, −120.27 points, −0.44%.
Russell 2000: 2,794.48, −12.50 points, −0.45%.
Nasdaq 100: 30,664.70, −218.45 points, −0.71%.
The divergence shows an uneven market heading into earnings season. Large Nasdaq-listed shares lagged, but the index snapshot alone does not establish which sectors or individual companies drove the move.
European stocks finish higher
European equities enjoyed a firmer start to the week, led by Spain:
Germany’s DAX: 25,277.69, +0.76%.
France’s CAC 40: 7,832.89, +0.38%.
UK’s FTSE 100: 10,656.28, +0.99%.
Spain’s Ibex 35: 19,285.79, +1.33%.
Italy’s FTSE MIB: 50,034.99, +0.58%.
Hammack keeps the inflation debate alive
With no major U.S. economic releases, Beth, Cleveland Fed president, supplied the main policy headline.
Her message leaned hawkish. She sees a need for additional restraint and is concerned about early signs that inflation expectations could become less anchored. A higher neutral rate would also imply that current interest rates may restrain activity less than their level alone suggests.
However, she acknowledged the pressure on lower-income households and the risks to employment. The debate she outlined is about the pace of further tightening, with the jobs side of the mandate still part of the balancing act.
Oil rises; metals and Bitcoin retreat
The supplied late-session snapshot showed:
WTI crude futures, CL1!: $93.21, +$1.36, +1.48%.
Gold, XAUUSD: $4,169.99, −$24.655, −0.59%.
Silver: $60.2222, −$0.5568, −0.92%.
Bitcoin: $82,969, −$710, −0.85%.
Oil remained sensitive to Middle East tensions. InvestingLive’s afternoon coverage reported renewed tension accompanying the push to fresh highs. Higher energy prices keep inflation risk in focus, although the closed Treasury market prevents assessing a same-day cash-yield response.
Gold’s decline was consistent with the stronger dollar. Silver also fell, while Bitcoin’s retreat lined up with the weaker Nasdaq and small-cap indices. That is a similar direction for the session, without establishing a lasting relationship.
A busier week starts Tuesday
Major bank earnings begin Tuesday, followed by U.S. CPI Wednesday and PPI and retail sales Thursday. The reports will test inflation pressures, consumer spending and corporate performance.
For the next session, watch whether EURUSD sellers can extend toward 1.11296, whether USDJPY buyers can hold above 158.54, and how Treasury yields respond when trading resumes. The dollar has momentum. Now comes the test of whether it can keep it.
This article was written by Greg Michalowski at investinglive.com.
Source: Investing Live - News
