Risk on, USD weaker

Frank Walbaum FX Strategies.Asia

Important news this week

Tue, 12th, 14:30 CET US Core Consumer Price Index.
Tue, 12th, tentative US Fed Chair Nomination Vote.
Wed, 13th, 14:30 CET US Core Producer Price Index.
Thu, 14th, 08:00 CET UK Gross Domestic Product.
Thu, 14th, 14:30 CET US Retail Sales.

Risk momentum

Markets are shifting back into a risk-on regime as the US dollar weakens and safe-haven demand continues to unwind. Easing tensions in the Middle East, combined with a lack of escalation signals in the Strait of Hormuz, are supporting a broader de-escalation narrative. The US move away from direct confrontation and continued signs of reduced military friction are encouraging capital flows back into equities and higher-beta assets. At the same time, expectations around US-Iran dialogue are improving sentiment further, reducing tail-risk pricing across markets. Oil is under pressure as geopolitical risk premiums fade, reinforcing the supportive backdrop for risk assets.

Market talk

Equities are trending higher with strong momentum in US indices, as both the S&P 500 and Nasdaq extend gains on improving sentiment and earnings support. European equities, including the DAX, are expected to follow, although the index remains technically sensitive in the near term. The US dollar continues to weaken, reflecting the shift into risk assets and softer demand for safety. USDJPY is under pressure as yen flows stabilize, while professionals remain cautious due to the risk of sudden policy intervention. USDCAD is starting the week on a softer footing, with further downside possible depending on risk flow continuation and commodity dynamics. Bitcoin is slightly lower, but the broader crypto trend remains intact, while altcoins show sharper pullbacks after recent strength. Overall, markets remain firmly in a risk-on phase, driven by de-escalation, liquidity rotation, and improving sentiment across assets.

Tendencies in the markets

Equities positive, USD sideways, BTC sideways, oil sideways, Silver positive, Gold weaker.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

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