Lower Demand for Risk Drives Investors into Safe-Haven Treasurys, Japanese Yen

U.S. stock market turmoil drove investors out of equities and into the safety of U.S. Treasury Bonds and the go-to-Japanese Yen. However, investors continued to shy away from the traditional safe-haven gold market.

U.S. Treasurys

U.S. government yields dropped on Monday as investors fled higher risk assets as trade concerns continued to weigh on economic sentiment. The yield on the benchmark 10-year Treasury note fell to 2.88 percent, while the yield on the 30-year Treasury bond fell to 3.027 percent.

Higher risk asset investors were reacting to a report in The Wall Street Journal that the Trump administration was preparing to place investment restrictions on China. However, later in the session, the White House denied the story.

Forex

The Dollar/Yen traded lower on Monday, putting it in a position to hit a two-week low, as worries about an escalating trade war between the United States and its major trade partners continued to weigh on an appetite for risk.

The EUR/USD strengthened on Monday, following through to the upside after Friday’s rally was fueled by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency.

The Euro’s gains may have been limited by worries over regional political instability tied to German Chancellor Angela Merkel. She faces pressure over a migration dispute that has divided Europe and threatened her government.

Gold

Gold futures traded lower as the lack of buying interest continued to weigh on prices. According to government regulators, long interest in gold is currently at a 2-1/2 year low. Reports show that hedge fund money is flowing away from gold and into the U.S. Dollar. Commodity Futures Trading Commission data shows that professional traders are loading up on bullish dollar bets at the fastest pace on record. This is in reaction to widely expected hawkish moves by the Fed.

---

• US Stocks Rebound Late after White House Denies WSJ Report on New Technology Restrictions Against China
• How Can Bitcoin Be Used as A Crime Weapon? And How Can this Be Solved?

---

Crude Oil

U.S. West Texas Intermediate and iinternational benchmarkBrent crude oil futures settled lower on Monday after an early rally failed to gain traction. The market was supported by reports of an outage at Syncrude Canada’s 360,000 barrel per day oil sands facility that could last through July.

Also supporting prices was uncertainty over Libyan oil exports, but dragging prices lower was OPEC’s plan to raise output. There were also reports circulating that the United States may ask Russia to increase output in an effort to lower prices.

Join our Telegram Channel