Global markets are exhibiting unusual trends as stocks, gold, and the U.S. dollar rise in tandem. Typically, investors seek alternatives, stocks, and gold separately, with gold often used as a hedge against looser monetary policy. However, recent market activity shows these assets rising together. Wall Street recovered after a brief stumble, with U.S. futures and European stocks rallying, as the STOXX600 and FTSE100 hit new records. French markets also showed signs of recovery amid budget deal progress. Gold surged past $4,000 per ounce.
The dollar index reached a near two-month high as the Japanese yen weakened, nearing 153 per dollar following leadership changes in Tokyo. Investors are closely watching the Federal Reserve for signals, with minutes from last month’s rate-cutting meeting and multiple Fed speakers scheduled. Futures markets still anticipate another rate cut later this month. The Bank of England cautioned about a potential market reversal if investor sentiment regarding AI or Fed independence were to sour.
In contrast to the prevailing global trend, the Reserve Bank of New Zealand surprised markets with a 50-basis-point rate cut, signalling potential further easing, which weakened the New Zealand dollar. Despite gains in French stocks and bonds, the euro fell to a one-month low. Spot bullion exceeded $4,000 per ounce, marking a year-to-date increase of over 50% as investors seek protection from policy and growth uncertainty, while some see it as insurance against an AI-driven bubble.
Finally, US lawmakers are advocating for broader bans on chipmaking equipment exports to China, and borrowing figures released by the UK statistics office showed government borrowing in the previous and current fiscal years was a combined 3 billion pounds lower than previously reported.
