FxGlobalHub: Market Recap: U.S Stocks, DXY and Treasury Yields rise on US - UK trade deal, Bitcoin hits $100,000

Stock market

US stocks ended higher on Thursday as investors assessed the new US - UK trade deal. President Donald Trump signaled that upcoming US - China trade talks would be more substantive than initially expected. The trade deal between the US and the UK includes lower import tariffs for the UK and expanded market access for US goods, though the US retains a 10% tariff on UK imports.

Boeing stock saw a 3.3% increase following the announcement that the UK would purchase $10 billion worth of planes, becoming the strongest performer on the Dow Jones index.

Trump also expressed optimism about the US - China trade negotiations expected to occur over the weekend, stating that he would not be surprised if a deal is reached.

The US stock market retreated slightly from its session highs towards the end of trading but still closed with gains:

🔹 Nasdaq: +1.07%

🔹 Dow Jones: +0.62%

🔹 S&P 500: +0.58%

Forex market

US Treasury yields surged as the US - UK trade agreement raised expectations of more deals to come. The 10-year Treasury yield rose 11.3 basis points to 4.388%, while the 30-year yield increased by 8.1 basis points to 4.853%. The 2-year yield, which is sensitive to the FED’s interest rate policies, gained 9.8 basis points to 3.891%.

The US Dollar gained against most major currencies, bolstered by market optimism following the US - UK deal. However, the British Pound reversed its gains after the Bank of England (BoE) cut interest rates:

🔹 USDJPY: +1.44%

🔹 DXY: +0.77%

🔹 USDCAD: +0.60%

🔹 GBPUSD: -0.35%

🔹 AUDUSD: -0.37%

🔹 EURUSD: -0.66%

Commodities market

On the commodity market, gold prices fell, influenced by the optimism in trade negotiations and a stronger US Dollar. Spot gold dropped 1.73% to $3,306.00 per ounce, while gold futures decreased by 2.35% to $3,301.90 per ounce.

Oil prices rose sharply, driven by positive trade talks between the US and China, the world’s two largest oil consumers. WTI crude increased by 3.17% (up $1.84) to $59.91 per barrel, while Brent crude gained 2.81% (up $1.72) to $62.84 per barrel, recovering from previous losses.

In the cryptocurrency market, Bitcoin surged past the $100,000 mark for the first time since February, climbing 4.93% to $101,544.25. Ethereum also saw a significant rise, jumping 17.79% to $2,118.37.

🔹 BTCUSD: +6.40%

🔹 WTI: +3.93%

🔹 Brent: +3.54%

🔹 XAUUSD: -1.74%

Forex trader's takeaways:

• 🔹 US Dollar strength: The US Dollar (USD) has strengthened across the board, particularly against the GBP and EUR, due to the US - UK trade deal and market expectations of more agreements. Traders should monitor USD pairs, especially USD/JPY and GBP/USD, for further fluctuations.

• 🔹 Treasury Yields & Forex volatility: The rise in US Treasury yields could signal more aggressive Fed policies, which might affect currency markets, especially those tied to interest rate expectations.

• 🔹 Gold and Oil dynamics: The drop in gold prices and surge in oil prices suggests risk-on sentiment in the markets. Gold traders may need to adjust positions if trade optimism continues, while oil traders should watch for developments in US - China negotiations.

• 🔹 Bitcoin breakthrough: Bitcoin's rise above $100,000 could signal increasing institutional interest and market confidence in cryptocurrencies. Bitcoin and Ethereum may continue to attract crypto investors as the crypto market sees new highs.

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