US Markets Edge Higher – Nasdaq Up 0.46%
US stock markets edged higher in trading yesterday as investors continued to maintain a positive outlook on President Trump’s recent, more flexible approach to tariffs. The Dow Jones closed near flat, up just 0.01%, the S&P gained 0.16%, while the Nasdaq rose 0.46% by the end of trading. The dollar drifted lower against most of the majors, with the DXY down 0.11% to 104.21, but notably fell sharply against the yen, closing nearly 100 pips lower on the day. Treasury yields also declined, with the 2-year down 2.2 basis points to 4.013% and the 10-year off 2.1 basis points to 4.313%. Oil prices remained relatively quiet despite further talk of a ceasefire between Russia and Ukraine, with Brent up 0.25% to $73.18 and WTI down 0.16% to $69.01. Meanwhile, gold pushed higher in line with the softer dollar, up 0.26% to $3,019.88.
Yen Remains the Most Volatile Major
The yen was undoubtedly the most volatile major currency last year, and if the first quarter of this year is anything to go by, it does not look likely to lose its crown in 2025. We have already seen a near 8% range in USD/JPY this year and, although this is in line with its contemporaries, the volatility within this range is much higher. Certainly, the haven factor of the yen has played a significant role in some of the sharp moves we have seen in the currency, particularly in response to geopolitical news and tariff updates. Additionally, the fact that Japan’s central bank is in a very different position compared to its counterparts has also contributed significantly. Traders expect this volatility to continue into the next quarter, especially with market uncertainty remaining high, and see both USD/JPY and yen crosses as offering some of the best opportunities for intra-day trading.
Inflation Data in Focus for Traders Today
Today is likely to be the busiest day of the week in terms of the economic calendar, with key inflation data releases that could trigger significant market movements. The Asian session sees the latest CPI data released in Australia, with households hoping for a lower print than the expected 2.5% year-on-year increase. This, combined with last week’s weaker jobs report, could push the RBA towards quicker interest rate cuts—especially after last month’s “hawkish” cut.
The European session will focus firmly on UK markets, with both the key CPI data release (expected at 3.0%) and the latest Annual Budget Release from the government. Sterling traders anticipate a busy day ahead.
The New York session is quieter today, with just the US Durable Goods data scheduled. Additionally, we will hear from the Fed’s Neel Kashkari and Alberto Musalem, though most traders still expect trade discussions to dominate sentiment.
