Summary: Strong falls in global equity and commodity markets yesterday have been halted as the Chinese market powers to a new high, although US equities still look shaky.

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1. Markets continued in a pronounced risk-off mode yesterday, with the US stock market hit especially hard following the worst drop in US CB Consumer Confidence data since 2021. Both the NASDAQ 100 and the S&P 500 Indices fell strongly to a level which will shake out many institutional long positions. Both indices have almost wiped out all 2025 gains and are not far from the “Trump open”. US markets off hours have shown a minor recovery, led higher by the Chinese Hang Seng Index which today powered to a new 3-year high price, driven mostly by the tech sector.
2. Bitcoin is continuing to react negatively to the risk-off environment, breaking below the round number at $90,000 to trade at its lowest price in three months, reaching a price below $86,000. These are bearish signs for Bitcoin.
3. Commodity markets have been hit quite hard by the risk-off environment as it suggests lower future demand, notably WTI Crude Oil which is currently trading at a 2-month low below $70 per barrel.
4. There are interesting developments from the US Presidential administration concerning metals:
   1. A deal has been concluded with Ukraine giving the US rights to mine Ukrainian minerals.
   2. President Trump has floated the idea of lifting sanctions on Russia as a means to get access to Russian rare earths which are crucial to US industry.
   3. President Trump has ordered an investigation into copper imports, which is seen as a likely first step towards the imposition of tariffs on copper imports.
5. In the Forex market, today’s Tokyo session has been relatively quiet, with little directional movement, and other markets have been much more dramatic than anything happening in the Forex world. As an asset class, the Japanese Yen stands out as an interesting outlier as the Bank of Japan now has a path to conduct divergent rate hikes over the course of 2025, which could push the USD/JPY currency pair and other Yen crosses to fresh lows, giving trend and momentum traders something to watch.
6. Gold is holding up quite well despite general selloffs in commodities, strongly outperforming Silver despite the typical strongly positive correlation between the two precious metals. It is currently trading only about $40 below its record high of $2,956 made just a few days ago.
7. Australian CPI (inflation) data released earlier today came in a fraction lower than expected, showing an unchanged annualized rate of 2.5% when 2.6% was widely expected. This may give a small tailwind to the general weakness in the Aussie.

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