Investors remain cautious as the U.S. dollar continues to weaken, despite steady selling rather than a sharp drop. Treasury yields are staying high, adding to market unease. Traders are closely watching potential changes in U.S. trade agreements and worrying about the country’s fiscal health.
The safe-haven yen and Swiss franc have benefited from this uncertainty. The euro also strengthened to a two-week high, even though U.S. Treasury yields rose during Asian trading hours.
Normally, rising Treasury yields support the dollar, especially against the yen. However, this link has weakened over the past month. President Donald Trump’s unpredictable trade policies have unsettled global markets and shaken investor confidence in U.S. assets.
In Europe, all eyes are on Marks & Spencer’s annual earnings report. The retailer suffered a costly cyberattack last month, which analysts say may have already cost it over £60 million ($81 million) in lost profits. The report will detail the impact of the attack, which forced M&S to stop online orders.
Investors will also focus on the UK’s April inflation data. This report could influence the Bank of England’s monetary policy decisions. The BoE cut interest rates by 0.25% on May 8, and markets expect another cut in June. Economists predict the consumer price index rose 3.3% in April, up from 2.6% in March, mainly due to higher household utility tariffs.
A Reuters poll suggests the UK economy may grow faster this year than previously expected, helped by strong growth in the first quarter.
In Japan, long-term government bonds remain under pressure after a poor auction pushed yields to record highs. This bond selloff challenges the Bank of Japan’s efforts to reduce debt purchases and normalize monetary policy. Rising borrowing costs also raise concerns about Japan’s high government debt.
Key market events today include UK inflation data and earnings reports from JD Sports and Marks & Spencer.
For those tracking trade tariffs, a new daily news digest called Tariff Watch offers updates on major market-moving headlines affecting global trade.
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