Global markets are seeing strong gains today, with European indices reaching session highs. A key driver of this momentum is the surge in defence stocks, fueled by discussions on increased EU spending in the sector. Meanwhile, US futures are also advancing, with the Russell 2000 (RTY) leading the charge.

USD Under Pressure as Tariff Deadline Approaches

The US dollar is struggling, facing downward pressure as markets brace for an impending tariff deadline. In contrast, the euro is benefiting from stronger-than-expected Eurozone HICP (Harmonized Index of Consumer Prices) data, which has exceeded market forecasts, further reinforcing its position.

Bonds Decline Amid Geopolitical and Defence Developments

The bond market is under strain, with prices hitting session lows. The decline comes as geopolitical tensions and heightened defence spending discussions weigh on sentiment. Investors appear to be adjusting their positions in response to shifting global dynamics.

Commodities in Focus: Crude Eases, Precious Metals Gain

In the commodities market, crude oil has pulled back from its Asia-Pacific session highs. However, precious metals continue to benefit from the risk premium associated with geopolitical uncertainties, as well as a weaker dollar. Gold and silver, in particular, are seeing sustained inflows as investors seek safe-haven assets.

Key Events Ahead: US ISM Manufacturing PMI, Japanese Unemployment Rate, Fed Comments

Looking ahead, markets will be closely watching several key economic events. The US ISM Manufacturing PMI is set for release, providing insights into the health of the manufacturing sector. Additionally, Japan’s unemployment rate data will be in focus, along with comments from Federal Reserve official Musalem, which could provide further clarity on the Fed’s policy direction.