Recent data suggests the US economy is cooling, though without inflicting lasting damage on consumers. US consumer sentiment fell by less than initially estimated, driven by expectations that inflationary pressures will moderate. Notably, the Federal Reserve’s preferred inflation gauge registered its smallest advance in six months, indicating a potential easing of price increases. Treasury 10-year notes remained largely unchanged on Monday.
As we enter the second half of the year, the looming uncertainty surrounding the US election is likely to make the dollar an attractive risk-off hedge. Its appeal as a safe-haven currency is expected to grow amidst potential market volatility.
In the commodities sector, oil prices remained stable as traders balanced concerns over China’s economic outlook with geopolitical risks in Europe and the Middle East. Similarly, gold prices showed little movement, reflecting a cautious market sentiment.