US Treasuries turn Bullish amid Dovish Outlook

Posted on June 26, 2025 by Olumide Adesina

US Treasuries surged as economic data releases confirmed speculation that the Federal Reserve will lower interest rates at least twice this year, setting them up for a third week of gains. Most tenors fell to their lowest level in over a month as a result of the move, which pushed yields down across maturities.

The Bloomberg Treasuries index has yielded a weekly return of roughly 0.6 percent.

Andrew Brenner, head of international fixed income at NatAlliance Securities, stated, “We’re going to keep rock and roll.” In terms of lower yields. Markets are worried that the unemployment rate will be much lower in a week.

There may be a reallocation from stocks to bonds during Monday’s month-end. Ahead of the Fed’s meeting later this month, traders are focusing on the jobs report. In addition to wagering on a third quarter, they are already fully pricing in two cuts by year-end, beginning in September.

U.S. personal spending growth rate for the first quarter, which was part of a revision to America’s first-quarter gross domestic product, changed from 1.2 percent to 0.5 percent on Thursday. Other economic indicators revealed surprising strength, such as lower-than-expected initial jobless claims. Short-dated bonds, which are more sensitive to the Fed’s policy outlook, saw the biggest gains after the release.

Two-year yields had dropped seven basis points to 3.71 percent by the end of the day. For the first time since 2021, the widely followed spread between the five- and 30-year notes rose to over 101 basis points, and a $44 billion auction of seven-year notes was warmly received. Fed rate cut expectations are typically linked to a steepening yield curve. Some bonds were already rising in response to a Wall Street Journal report suggesting President Donald Trump would soon appoint Jerome Powell’s successor.

Investors Rush to dollar as Iran plans Revenge

Posted on June 23, 2025 by Olumide Adesina

The greenback strengthened as nervous investors sought refuge. However, the cautious actions indicate that markets were preparing for Iran’s reaction to US strikes on its nuclear facilities, which have intensified the conflict in the Middle East.

The euro was down 0.3 percent at $1.148, while the Australian dollar, frequently viewed as a risk proxy, fell to a one-month low and was last down 0.67 percent at $0.6408. Lastly, the dollar index, which measures the dollar’s strength, was up 0.12 percent at 99.37.

Iran’s Press TV reported that the Iranian parliament had approved a measure to close the strait. Iran has never actually closed the Strait despite previous threats. Tensions around the world increased on Monday as Iran and Israel exchanged missiles and airstrikes over Tehran’s anticipated reaction to a US attack on its nuclear facilities.

Major changes occurred in the oil market, where crude prices reached a five-month high and global stocks fell following the US attacks on Iran’s nuclear installations and reports that President

Market players anticipate further price increases as concerns grow that an Iranian retaliation might involve closing the Strait of Hormuz, through which a fifth of the world’s crude supply passes.

The current geopolitical escalation is the fundamental catalyst for Brent to rise and possibly spiral towards $100, with $120 per barrel looking increasingly plausible. Donald Trump suggested that the Islamic Republic’s government should be changed

Markets Cash on U.S dollar but downside Risk High

Posted on June 14, 2025 by Olumide Adesina

Investors loaded into safe-haven assets following a series of Iran-Israel conflicts, causing the US dollar to rise on Friday after trading at a three-year low the day before.

The scale of the assault, which signifies a notable intensification of hostilities in the region, caught markets off guard and led to an increase in the dollar’s value along with other assets that are typically expected to provide stability during periods of heightened volatility.

The dollar index, which measures the greenback’s strength against a basket of six major currencies, settled at 98.19 on Friday, up 0.3 percent.

According to Israeli Prime Minister Benjamin Netanyahu, Israel has initiated a “targeted military operation” against Iran’s nuclear and ballistic missile programs. In response, Iran asserted that it fired over 100 drones at Israel.

Netanyahu declared, “This operation will continue for as many days as it takes to eliminate this threat.”

The attack on Israel, according to US Secretary of State Marco Rubio, was “unilateral” and carried out without US involvement. Rubio stated, “Our top priority is protecting American forces in the region, and we are not involved in strikes against Iran.”

Iran launched ballistic missiles at Israel on Friday, as confirmed by the Israel Defense Forces and Tehran. Iran’s official news agency announced that the Hard Retaliation operation had commenced.

The dollar’s rise against the Swiss franc and Japanese yen, two currencies generally viewed as safe-haven assets, by 0.1 percent and 0.4 percent, respectively, affirmed its role as a safe-haven investment. In uncertain times, investors gravitate towards safe-haven assets to protect their capital from market fluctuations and to find stability when riskier assets decline.

The dollar’s downward trend, worsened by the Trump administration’s policy uncertainty, seemed unrelenting before the strikes.. As interest rate cuts devalue a currency, expectations that the Federal Reserve would lower interest rates sooner rather than later also significantly contributed to the dollar’s decline.

Investors speculate that the US dollar will fall again, leading to substantial short-selling of the currency. A survey from Bank of America, released on Friday, indicated that while dollar shorts are deemed the most crowded trade, “conviction in short USD remains largely intact.” “

RBI: India’s Central Bank Shocks Market, Lowers Interest Rate

Posted on June 6, 2025June 7, 2025 by Olumide Adesina

India’s central bank significantly reduced its benchmark policy rate, which had been at its lowest since August 2022, from 6% to 5%. Additionally, this is the third consecutive rate cut since February and falls short of the median forecasts of 5.75% in a Reuters poll.

The decision was made because inflation had considerably decreased and growth had been “lower than our aspirations amidst a challenging global environment and heightened uncertainty,” RBI Governor Sanjay Malhotra stated in a livestream.

The economy grew 7% year over year following a better-than-expected GDP growth figure in its fiscal fourth quarter, compared to the 6% predicted by Reuters-polling economists. The decision was made.
The decision was made in response to a better-than-expected GDP growth figure in its fiscal fourth quarter, which showed the economy growing 7% year over year as opposed to the 6% predicted by Reuters-polling economists. In contrast to the 9.2% recorded in the previous fiscal year, which concluded in March, the central bank maintained its full-year GDP estimate at 6.5%, indicating a significant drop.

“There is strength, stability, and opportunity in the Indian economy,” Malhotra stated.

The RBI raised concerns amid the threat of U.S. tariffs. The decision was made when India’s inflation rate fell, giving the RBI flexibility to lower interest rates.

The headline inflation rate for April was 3.16%, the lowest since July 2019. Malhotra warned that inflation might fall short of the target after the RBI lowered its previous inflation outlook from 4% to 3% for the current fiscal year.

High Sell-Offs in U.S Treasuries Scare Market

Posted on April 22, 2025 by Olumide Adesina

The 10-year US Treasury yield increased as stalled global trade developments weighed on investor sentiment.

The benchmark yield on the 10-year Treasury was 4.4263 percent, two basis points higher. The 2-year Treasury yield rose by more than five basis points to 3.8064 percent.

Investor confidence remained low despite the stalling of international trade negotiations. Beijing warned other nations against entering into agreements with the US that might be detrimental to China’s interests, seemingly escalating tensions between the two largest economies in the world.

President Donald Trump’s pressure on US Federal Reserve Chairman Jerome Powell to lower rates undermined the trust in US assets.

A steep selloff in the US Treasury market raised questions about who is selling them. According to preliminary information provided by Japan’s finance ministry and analyzed by Moody’s Analytics, Japanese investors may have sold some foreign bonds, most likely Treasuries, not in sufficient quantities to account for the yield spike, the analytics company wrote in a note.

Moody’s Analytics’ head of Japan and frontier markets economics, Stefan Angrick, stated that between March 30 and April 12, “weekly statistics on international securities flows show major Japanese investors were net sellers of foreign long-term bonds, most likely US Treasuries.”

Panic selling in U.S Treasury Bonds Unsettle Market

Posted on April 11, 2025 by Olumide Adesina

The 10-year Treasury yield increased on Friday, continuing its sharp weekly rise as investors sold US assets in favor of other international safe havens due to President Donald Trump’s dizzying trade actions.

The benchmark 10-year Treasury yield rose an additional 10 basis points to 4 percent. It surged to its highest level since Valentine’s Day.

The 2-year Treasury yield climbed by almost 11 basis points to 3.952 percent. The 10-year yield ended last week at about 4 percent but has risen by more than 50 basis points, marking one of the highest surges ever.

This action reflects a significant shift in how investors view Treasurys. The US Treasury securities have traditionally been a refuge for investors during turbulent times.

This week, traders speculated that China and Japan were selling Treasurys due to heightened trade tensions, but that does not appear to be the case. Low financing costs seem to be a key aspect of the Trump administration’s overall agenda, so the reversal of market trends and rising Treasury yields raised serious concerns in the White House

Rates continued to climb to levels that frightened markets despite the pause.

The increase may have complicated the White House’s trade strategy. Trump reduced tariffs to a universal rate of 10 percent and announced a 90-day tariff pause for most nations. Since China was not included in this reprieve, US tariffs on Chinese imports increased to 145%.

DAX 40, EUR: Bullish or Bearish After AfD’s Surge to 20% in Bundestag

Posted on February 23, 2025February 23, 2025 by Skerdian Meta

German election exit polls show that the AfD party claimed 20% of the votes for the Bundestag, meaning the conservatives with form a coalition, however it’s not certain whether this will be bullish or bearish for the Euro and Dax 40 index in the long term.

Continue reading “DAX 40, EUR: Bullish or Bearish After AfD’s Surge to 20% in Bundestag” →

U.S. Dollar Holds Euro, Chinese Yuan, Canadian Dollar Hostage

Posted on February 3, 2025 by Olumide Adesina

Donald Trump’s new tariffs have boosted the US dollar’s bullish run in February. This protectionist approach is causing global markets to tremble and investors to reposition themselves. The day is expected to be extremely tense with the U.S ISM manufacturing index and the eurozone’s inflation data.

The announcement of Trump’s tariffs set off a series of market reactions. The US dollar jumped amid these tensions, closing the previous week at 108.5 and opening at 109.78 index points.

The Canadian dollar fell to its lowest level since 2003, and the Mexican peso fell to its lowest level in three years. The Euro continued to decline against the dollar, and the Chinese yuan dipped precipitously, pushing the USD/CNH to the 7.36 resistance level.

Donald Trump imposed hefty customs taxes on the US’s most important trading partners. Reactions were prompt. Among the measures announced were a 25 percent tax on imports from Canada and Mexico and a 10 percent customs duty on Chinese goods.

Prime Minister Justin Trudeau of Canada swiftly retaliated by introducing tariffs on American goods worth over $100 billion.

President Claudia Sheinbaum of Mexico also issued a retaliatory order that targeted American imports. Trump has no plans to end there. He acknowledged that he intended to impose additional tariffs when asked if he would consider incorporating the European Union into his trade strategy. She did not specify the scope or timing of these measures.

China said it would take the matter to the World Trade Organization, while Canada and Mexico threatened retaliation

Markets keenly await the Federal Reserve’s next moves and the governments’ reactions as economic and geopolitical uncertainties increase. Predicting the future movements of the dollar and other major currencies will depend on the evolution of inflation in the eurozone and the performance of the US manufacturing sector.

Forex Signals Brief January 22: Trump and WEF Converge on AI, Oracle Stock Surges 7%

Posted on January 22, 2025January 21, 2025 by Skerdian Meta

Yesterday was the first day of Donald Trump in Office, and the volatility remained elevated, with risk assets resuming the surge after a retreat in the morning.

Continue reading “Forex Signals Brief January 22: Trump and WEF Converge on AI, Oracle Stock Surges 7%” →

Nasdaq and S&P 500 End Week Higher Ahead of Trump’s Return

Posted on January 17, 2025 by Ignacio Teson

Wall Street’s three main indices closed the week with solid gains, supported by an optimistic market outlook on the economy and anticipation of Donald Trump’s return to the presidency.

The Dow Jones rose 0.78% to close at 43,487.83 points, ending the week with a 3.69% increase—its largest weekly gain since late November. The S&P 500 advanced 1% to 5,996.66 points, up 2.91% for the week, also marking its biggest rise since late November. Meanwhile, the Nasdaq Composite climbed 1.51% to 19,630.20 points, with a weekly gain of 2.45%, its best performance since early December.

[[SPX-graph]]

Ten of the eleven sectors in the S&P 500 closed higher on Friday, led by consumer discretionary stocks, which rose over 2%. The healthcare sector was the only one to decline, down 0.26%. Within the Dow Jones, notable gainers included Nvidia (+3.10%) and Amazon (+2.39%).

Optimism Over Economic Data

This week’s inflation data eased concerns about renewed price pressures and fueled hopes that the Federal Reserve may continue cutting interest rates this year.

Next week, 41 companies are set to release earnings, including Netflix, United Airlines, American Express, and Procter & Gamble.

Earnings Season Update

The earnings season also buoyed markets, with strong results from major banks such as Wells Fargo, JP Morgan, and Goldman Sachs. The S&P 500 banking index surged nearly 7% this week.

So far, 42 S&P 500 companies (8% of the index) have reported Q4 2024 earnings, with 79% beating profit expectations and 67% surpassing revenue estimates, according to FactSet.

On Monday, U.S. markets will be closed for Martin Luther King Jr. Day. However, investors are expected to closely monitor President-elect Donald Trump’s first actions as he returns to the White House.