Risk assets grind higher as volatility drops and yields rise
Today’s Market Mood, Key Events, Market Moving News.
📈 Market Mood:
▲ Bullish – Equities push higher with falling volatility despite higher yields.
🗓 Key Events:
No major scheduled economic events today – Thin calendar keeps focus on price action and global news.
🌐 Market Moving News:
Asia shares extend tech-led rally while the yen remains under pressure.
Gold hits an all-time high as demand stays firm amid currency moves.
China leaves benchmark lending rates unchanged for a seventh month.
Asset Snapshots:
🟢 S&P 500: Bullish – Index trades higher with broad participation and lower volatility.
⚪ USD (DXY): Neutral – Dollar edges lower despite higher US yields.
🟢 Gold: Bullish – Prices surge to record highs, supported by currency dynamics.
⚪ Oil: Neutral – Crude ticks higher but remains range-bound.
🟢 Bitcoin: Bullish – Continues to grind higher alongside risk assets.
Non-US Indices:
🟢 Nikkei: Bullish – Japanese equities extend gains despite yen weakness.
⚪ DAX: Neutral – Modest gains with no strong regional catalyst.
🔴 HK50: Bearish – Underperforms as China-related uncertainty persists.
Volatility S&P 500 Index (VIX): 14.91 – Falling sharply, signaling easing market stress and supportive risk sentiment.
Fed Watch (Jan 2026): Markets price a 79.0% chance of hold at 350-375, with 21.0% expecting a cut.
Credit Markets: HYG and LQD both fall, suggesting mild caution beneath the equity rally.
Bond Curve: 2Y, 5Y, and 10Y yields all move higher, pointing to firm rate expectations and a resilient macro tone.
FX Flows: USD/CNH edges higher while EUR/USD slips, indicating mild global risk appetite with ongoing pressure on Asian currencies.
Macro Bias:
Shows overall bullish, bearish, or neutral trends across major markets based on key economic data. It reflects how indicators like GDP, inflation, employment, retail sales, and PMIs are performing. When data improves, the bias turns bullish; when it weakens, bearish; when mixed, neutral.
Indices:
🟢 S&P 500: Bullish
🟢 Nasdaq 100: Bullish
Currencies:
🟢 USD: Bullish
⚪ EUR: Neutral
🔴 JPY: Bearish
⚪ GBP: Neutral
⚪ AUD: Neutral
⚪ CAD: Neutral
Commodities:
🟢 Gold: Bullish
⚪ Oil: Neutral
Crypto:
🟢 Bitcoin: Bullish
🪙 Price Action Notes:
Falling VIX supports continued equity strength.
Rising yields remain a key factor to monitor for risk assets.
Gold strength contrasts with softer credit markets.
Disclaimer:
This newsletter is for information only and not financial advice. Markets carry risk, and past performance does not guarantee future results. Always do your own research or consult a qualified advisor before making investment decisions.