Global markets traded in a consolidative range overnight as investors digested the Fed’s latest policy decision, resilient economic data and ongoing cross-asset moves. With central banks signalling patience rather than urgency, price action was driven more by positioning and relative value than fresh macro catalysts.
United Staes: Fed’s Hold Keeps Risk in Check
U.S. equities finished little changed, the S&P 500 holding near record highs after breaking US$7000 for the first time as the Fed left rates on pause and reiterated a data-dependent stance. Chair Jerome Powell signalled that policy remains restrictive and that further evidence of cooling inflation, which is at 2.7% above the Fed’s 2% target is needed before cuts are considered, reinforcing expectations that there won’t be easing soon.
The message helped anchor markets. Strong earnings continued to support equities, but the absence of a dovish shift capped upside. Treasury yields were mixed, with the 10-year yield holding near recent highs, reflecting solid growth momentum and restrained rate-cut expectations. Volatility remained subdued, pointing to consolidation rather than risk aversion.
The US dollar having faced some pressure earlier this week, stabilised as policymakers reiterated commitment to a strong currency framework, even amid broader dollar weakness trends.
Europe: Equities Lag as Growth Concerns Persist
European equity benchmarks traded weaker, with major indexes underperforming as investors grappled with a lack of fresh catalysts and persistent policy uncertainty. Cyclical sectors lagged, while defensive and high-quality names offered relative stability, a pattern consistent with broader risk aversion across global markets.
Currency dynamics added another dimension. The euro strengthened toward multi-year highs against the U.S. dollar, supported by dollar softness and firmer European growth expectations, before retracing some moves amid risk shifts. Sterling also saw supportive flows before afternoon profit taking.
European bond markets were stable but sensitive to yield differentials and cross-asset flows, underscoring how currency moves are becoming a central transmission channel for risk pricing.
Markets also noted progress on a new EU–India trade deal, which aims to cut tariffs on the majority of goods traded between the two regions and deepen cooperation in services and investment. While the agreement will take time to filter through to earnings, it is viewed as a structural positive for European exporters and a strategic step to diversify trade ties amid global fragmentation. This new agreement will particularly help autos and luxury goods.
Asia & ASX: Mixed Leads and Commodity Support
Asian bourses were mixed in overnight trading, balancing offshore cues with regional economic data and earnings flows. Markets in Hong Kong and parts of North Asia showed strength, while others lagged as investors weighed global yield trends and currency pressures.
In Australia, ASX 200 futures were modestly higher before the local open, suggesting a cautious but positive sentiment tone to start the session. Resource and commodity-linked sectors, especially gold and base metals miners, continued to attract interest amid elevated precious metals prices and strong commodity fundamentals.
Rate-sensitive areas — including parts of tech and consumer discretionary — remained under pressure, reflecting ongoing uncertainty about the Reserve Bank of Australia’s near-term policy direction in the face of firmer inflation prints.
Currencies: Broad Dollar Dynamics & FX Themes
Currency markets were a standout theme. The U.S. dollar stabilised against a backdrop of mixed macro signals, but broader trends show the dollar trading near multi-year lows against major crosses like the euro and sterling amid concerns over policy consistency and political noise in the U.S. policy mix.
The Australian dollar was firmer, supported by commodity strength and positive risk-tone cues, though gains were capped by global yield dynamics and cautious positioning in global FX markets.
Commodities: Gold Nears Records, Oil Steady
Gold continued to attract safe-haven flows, trading close to record levels as investors balanced equity resilience with structural uncertainty in currency and policy outlooks. Strong haven demand — reinforced by global political and economic cross currents — has been a core driver of elevated bullion pricing.
Oil prices remained steady, supported by supply considerations and resilient demand expectations, helping underpin energy sectors across regional benchmarks.