Friday Opens Flat as Traders Digest Bond Market Shock

We begin Friday’s European session on a tentatively stable note following a volatile Thursday, where sharp swings in sentiment dictated the flow of global markets. Indices this morning are relatively flat, but the overall backdrop remains positive, especially after Monday’s strong gains.

Thursday Recap: Yields Stir the Pot

The big story on Wednesday and Thursday was the sudden surge in U.S. Treasury yields. The 30-year yield climbed above 5%, the highest level since October 2023, while the 10-year note touched 4.59%. This spike in yields rekindled concerns about U.S. debt sustainability and future rate expectations, triggering heavy selling pressure on U.S. equities.

Currency Market: Dollar Drops, Yen Surges

On the Forex front, the Japanese yen remains in focus — it was the strongest currency on Thursday and continues to gain ground this morning. The U.S. dollar, which had been relatively firm earlier in the week, came under renewed pressure. This Friday morning, USD remains weak, continuing its Thursday slide. The Canadian dollar also dipped slightly, while the Australian and New Zealand dollars are pushing higher. The British pound is showing resilience after positive retail sales figures this morning.

Friday’s Currency Leaders:

• Strongest: JPY, AUD, NZD

• Weakest: USD, CAD

Commodities: Gold Shines, Oil Drifts

Gold extended its gains on Thursday as risk sentiment deteriorated and demand for safe havens climbed. The metal is now firmly in bullish territory, backed by strong technicals. The rally in silver, platinum, and palladium also continued, with platinum in particular holding on to double-digit percentage gains for the week.

Oil, on the other hand, is struggling to build momentum. After a modest start to the week, Thursday brought a pullback, and prices are now trading in a tight, sideways range, leaning slightly bearish.

Friday’s Data Watch:

This morning, we already received:

• Retail Sales from the UK: A beat at 1.2%, supporting GBP strength.

• Retail Sales from New Zealand: Also came in better than expected.

Still ahead:

• Retail Sales from Canada – could add volatility to CAD pairs.

Source: https://www.axiory.com/analytics/market-news/friday-opens-flat-as-traders-digest-bond-market-sh