Markets Recover Early Gaps as Yen Weakens, Pound Gains

Good morning traders, and welcome to a quiet Monday on the macroeconomic front. While the economic calendar is empty today, markets are still processing Chinese inflation data from Sunday, which came in at 0.5%, slightly above the expected 0.4%. This news has yet to cause any major shifts, as traders turn their attention to market openings and sentiment-driven moves.

On the earnings calendar, today’s key release is McDonald’s, which will report results before the U.S. market open. However, McDonald’s is the only major player posting earnings today, leaving the broader market to focus on technicals and early week sentiment.

Markets opened with volatility and gaps. There were bullish gaps on some assets, while pairs involving the Japanese yen experienced bearish gaps, reflecting early strength in the yen. The euro-dollar and cable (GBP/USD) also opened with bearish gaps, along with indices, which dropped at the start of the session. However, these moves were quickly reversed. The yen has since weakened, and indices and EUR/USD have recovered, turning positive for the morning.

Currently, futures are flashing green, signaling optimism for a positive start in the European and U.S. cash markets. In the currency market, the yen continues to give back early gains and is currently among the weaker currencies. Meanwhile, the British pound has strengthened significantly and is one of the top-performing currencies. The Australian and New Zealand dollars are also gaining momentum.

In commodities, the market is off to a mixed start. Both gold and silver are climbing higher, while platinum and palladium are under pressure, trading lower. In the energy market, oil is showing strength, rising steadily as Monday’s session gets underway.

With little on the calendar to influence markets today, traders will be closely watching technical signals and sentiment shifts. The positive tone in indices and commodity gains, especially in gold and oil, sets a promising outlook as the week unfolds.

Source: https://www.axiory.com/analytics/market-news/markets-recover-early-gaps-as-yen-weakens-pound-ga