Treasury Yields and Digital Assets Stage Recovery
After a rocky start to the trading session, both US Treasury yields and cryptocurrencies clawed back earlier losses. However, sentiment across financial markets remains fragile, as investors reassess the impact of tariffs and federal spending cuts on US economic growth. Wall Street’s bullish optimism has cooled, with risk appetite taking a hit amid heightened policy uncertainty.
Dollar Faces Pressure as Safe Havens Shine
The US dollar weakened against most G-10 currencies on Tuesday, with the exception of the Australian and New Zealand dollars, which lagged amid shifting risk dynamics. The Swiss franc and Japanese yen both traditional safe-haven assets—outperformed, reflecting a more defensive tone in global markets. Meanwhile, the euro extended gains as investors bet on improved growth prospects across the Eurozone.
Oil Slides as Growth Concerns Mount
Crude prices fell for a second consecutive session, tracking broader declines in equity markets and other risk-sensitive assets. The prospect of sluggish economic expansion in the US, exacerbated by trade tensions and fiscal tightening, has cast a shadow over the demand outlook for oil. With recession risks creeping back into the conversation, energy markets are bracing for further volatility.
Gold Gains Amid Inflation and Policy Uncertainty
Gold edged higher as investors sought protection against lingering macroeconomic risks. A monthly survey from the Federal Reserve Bank of New York revealed that US consumers are bracing for higher inflation in the near term while growing more concerned about their financial outlook. Inflation expectations are in sharp focus as President Donald Trump’s policy agenda ranging from trade tariffs to immigration restrictions continues to stir uncertainty over growth and price stability.