Risk-On Monday: Indices Surge on Trade Optimism

Hello traders, and welcome to Monday’s market commentary, where optimism is the dominant theme across the financial landscape. The session starts with positive headlines from the geopolitical front, as top Chinese and US economic officials reportedly hashed out a preliminary framework for a trade deal ahead of the upcoming meeting between Donald Trump and Xi Jinping. This development — seen as the first constructive step in weeks of tense rhetoric — is naturally being welcomed by the markets. The mood is risk-on, and that’s immediately visible on the charts: indices are flashing green, global futures are climbing higher, and investors are rotating back into riskier assets after several cautious sessions.

On the currency market, the reaction follows a classic risk-on pattern. We see commodity currencies like the Australian dollar and the New Zealand dollar climbing strongly, supported by the positive trade news. In contrast, safe havens such as the Swiss franc and the Japanese yen are under heavy pressure, losing ground as traders unwind defensive positions. The US dollar remains relatively steady, showing resilience but not dominating the scene — a sign that investors are comfortable taking on more risk.

Turning to commodities, the picture is more mixed. Gold continues its correction phase, extending last week’s bearish move. The metal is making an early attempt to push lower, and sellers are clearly in control for now, aiming for a new leg down in this ongoing correction. Other metals such as palladium, platinum, and silver are also declining, reflecting lower demand for safe-haven assets. Meanwhile, oil, which enjoyed a stellar week previously, is seeing a mild pullback today — a natural technical correction after recent gains rather than a shift in trend.

Looking at the macro calendar, Monday is quiet, with no key economic data scheduled. Traders should, however, prepare for a mid-week explosion of volatility, as Wednesday will be packed with key releases and events, including several high-impact data points and central bank commentary. The earnings calendar mirrors this calm start — today is empty, but activity will ramp up sharply by Tuesday and especially Wednesday and Thursday, when major companies are set to report.

All in all, the European session begins with broad optimism and a clear risk-on tone. With the prospect of a US–China trade deal back on the table, global markets are breathing a sigh of relief — at least for now. Whether this optimism will hold through the week depends on how concrete this “initial draft” of the deal turns out to be and whether traders believe it can translate into real progress.

Source: https://www.axiory.com/analytics/market-news/risk-on-monday-indices-surge-on-trade-optimism