Synopsis
Global markets saw a slowdown on Monday. Stocks and precious metals posted significant losses. The Japanese yen has weakened significantly. The sentiment follows a volatile week and ahead of crucial central bank decisions and economic reports. Investors are adjusting their expectations in the face of these developments.
P.A.Stocks fell and precious metals deepened their losses on Monday, underscoring fragile market sentiment after a choppy weekend on Wall Street. The yen has weakened.
Stocks fell and precious metals deepened their losses on Monday, underscoring fragile market sentiment after a choppy weekend on Wall Street. The yen has weakened.
Asian stocks fell 0.5% and Nasdaq 100 Index futures fell 1%. The dollar strengthened against most of its Group of 10 peers, particularly against the Japanese currency, after the country’s prime minister said a weak yen could pose a huge opportunity for export industries. This follows the greenback’s strongest day since May on Friday following President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chairman.
Gold fell more than 2%, extending its decline after suffering the biggest decline in more than a decade on Friday. Silver fell after its record 26% drop on the last trading day of January. Bitcoin edged higher in early Asian trading after slipping below $76,000 in weekend trading, revisiting levels last seen during the fallout from Trump’s “Liberation Day” tariffs last year.
Taken together, the moves indicate lackluster sentiment heading into a busy week that includes rate decisions from central banks in Europe and the U.K., a U.S. jobs report and a heavy slate of corporate results. Global markets adjusted their positions on Friday to reduce expectations of policy easing under Warsh.
“The complete collapse in precious metals prices shows that any market can become prey to mania,” Kyle Rodda, senior analyst at Capital.com, wrote in a note. “Given the increased positioning and leverage involved, the selloff is spilling over into other markets. In effect, deleveraging is occurring.”
The dollar’s gains Friday reflect not only ructions in precious metals, but also the fact that Trump’s choice of Fed chair may not be as dovish as many had expected.
If confirmed by the Senate, the former Fed governor will succeed Jerome Powell when his term ends in May. Warsh, 55, aligned himself with Trump in 2025 by publicly advocating for lower rates, going against his long-standing reputation as an inflation hawk. The US president said Friday that he had not asked Warsh to commit to spending cuts.
“Markets could price in a slight acceleration in rate cuts, but an aggressive easing cycle seems unlikely,” said Jason Pride of Glenmede.
Warsh’s choice should help stabilize the dollar somewhat and reduce, but not eliminate, the asymmetric risk of deep, prolonged weakness in the U.S. currency by challenging “debasement” trades — which is also why gold and silver are significantly lower, according to Evercore’s Krishna Guha.
“But we advise against overdoing Warsh’s hawkish trading in asset markets – and even see a risk of whiplash,” Guha said. “We view Warsh as a pragmatist, not an ideological hawk in the tradition of the independent conservative central banker. »
Elsewhere in the commodities sector, OPEC+ ratified its plan to hold production steady in March – the final part of a three-month supply freeze, even after prices hit a four-month high due to the prospect of a US strike on Iran.
Meanwhile, Indian stocks slumped on Sunday after the government announced plans to increase taxes on equity derivatives transactions, doubling down on efforts to curb speculative activity by retail investors.
Additionally, the U.S. government faced a partial shutdown Saturday as it waited for the House to approve a funding deal Trump reached with Democrats following a national outcry over the killing of a U.S. citizen by Border Patrol agents in Minneapolis.
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