Global markets found a moment of relief on Thursday as positive U.S. economic data collided with currency intervention and soft commodity signals. While the dollar lost some altitude and equities recovered, structural concerns around inflation, central‑bank policy and demand in energy markets keep the mood cautious.
U.S. Services Activity and Jobs Surprise Give Risk Assets a Boost
Better‑than‑expected U.S. services‑sector data and a rebound in private‑sector payrolls helped ease concerns over stretched valuations in equity markets. The indices responded accordingly, with the S&P 500 and Nasdaq Composite both ending higher.
Despite this, markets tempered expectations of imminent rate cuts by the Federal Reserve, and yields on the 10‑year Treasury edged up to around 4.15%.
For traders, the takeaway is clear: momentum is returning, but the backdrop of high valuations and policy uncertainty remains intact.
Asian Equities Snap Back While Indian Rupee Holds Ground
Asian markets rallied for the day, with Japan’s Nikkei 225 jumping around 1.5 percent and South Korea’s KOSPI gaining over 2 percent.
In India, the Indian rupee held firm following intervention by the Reserve Bank of India (RBI) which aimed to prevent weakness beyond the 88.80 mark versus the U.S. dollar.
The recovery in Asian risk assets suggests that liquidity and sentiment may be rotating back in—but incoming data and central‑bank cues will be key for follow‑through.
Dollar Pauses Below Recent Highs as Sterling Waits on BoE
The U.S. dollar softened slightly after recent highs as risk appetite improved. Simultaneously, the British pound faced pressure ahead of the Bank of England (BoE) rate‑decision due later today, which presents a fine balance between inflation pressures and muted growth.
For FX traders, the setup highlights a tug‑of‑war: dollar stays elevated but may be vulnerable if global risk ramps up, while the pound and other currencies hang on policy expectations.
Oil Stalled as Demand Worries and Inventory Buildup Loom
Oil prices were largely flat, reflecting ongoing concerns about weak demand growth and mounting global inventory.
Brent crude held near USD 63.54 per barrel and WTI around USD 59.60. With growth in global demand falling short of earlier forecasts and supply from non‑OPEC producers rising, some analysts are pointing to a potential downside to USD 60 by end‑25 and USD 50 by end‑26 for oil.
Commodities traders may want to use this as a signal to remain selective—oil upside looks capped unless there is a clear supply shock or demand surprise.
Outlook for Traders: Watch the Flow, Not Just the Headlines
- Equities: A bounce in global risk assets is underway, but high valuations mean traders should watch for reversal triggers—especially in tech.
- FX: With the dollar slightly off recent highs, focus is on whether the BoE signals pivot and if the rupee stays supported amid Indian intervention.
- Commodities: With oil facing headwinds, watching for real demand shifts or cuts in production reserves will be crucial.
- Policy & Data: While the U.S. data surprise is positive, the Fed remains cautious and the BoE decision looms—these are the next catalysts to tip markets.
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