Risk sentiment turns negative as markets correct

Frank Walbaum

Important news this week

Fri, 09th, 14:30 CET CA Unemployment Change/Employment Rate.

Risk sentiment turns negative as markets correct

Risk sentiment is turning more negative, with stocks moving lower across the board. The S&P 500 is giving back ground, while the Nasdaq is also entering a correction. Crypto is heading south as most tokens weaken around their daily 50-day moving averages.
The USD remains positive but is no longer moving higher, which could increase the likelihood of a Dollar correction. Metals are also under pressure, with Silver particularly weak and potentially affected by concerns over industrial demand.

Market talk

The Nasdaq correction is becoming increasingly important for the broader equity market. If technology stocks continue to weaken, the recent positive sentiment could fade and put additional pressure on the wider stock market. The reaction around current support levels will therefore be important.
Silver is showing more pronounced weakness than Gold, which may reflect concerns beyond the usual USD effect. As an industrial metal, Silver can also be sensitive to expectations for manufacturing and global demand, making its current weakness worth watching.

Tendencies in the markets

Equities weak, USD strong, crypto weak, oil stronger, metals down, JPY weak.

Author

Frank Walbaum

AUD/USD consolidates above 0.6950 amid risk aversion

AUD/USD consolidates in the Asian session on Thursday, trading just above 0.6950 as traders assess developments in the Middle East crisis. The Pentagon reportedly ordered readiness for potential strikes against Iran. This keeps the geopolitical risk premium in play, which, along with hawkish FOMC Minutes and elevated US bond yields, will likely keep the US Dollar underpinned at the expense of the pair.

USD/JPY slips below 158.00 as USD retreats

USD/JPY returns to the red below 158.00 in the Asian session on Thursday amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, the US Dollar eases from near an 18-month high on profit taking, ignoring Wednesday's hawkish FOMC Minutes and the risk of a further escalation of tensions in the Middle East, adding to the pair's pullback.

Gold bulls remain on the sidelines as hawkish Fed and Middle East jitters underpin USD

Gold trims its intraday gains and trades near $4,125 during the early European session on Thursday, up around 0.35% for the day. A combination of factors helps the US Dollar retain a bullish undertone, which keeps a lid on the precious metal's bounce from a two-month low, touched the previous day.

Ripple and Stellar test key support amid rising downside risks

Ripple (XRP) and Stellar (XLM) remain under pressure and extend their corrections on Thursday as weakening derivatives metrics and broader macroeconomic headwinds weigh on sentiment. XRP and XLM approach a key support zone after three consecutive days of losses so far this week.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.