The week has kicked off with heightened volatility in global markets. European stock exchanges opened with optimism but quickly succumbed to selling pressure as investor sentiment took a hit. Across the Atlantic, US futures are also deep in the red, with the Nasdaq leading declines at -1.2%.

Currency Markets: JPY Strengthens as USD Struggles

The US dollar is failing to mount a recovery after last week’s selloff, marking a choppy start to the week. Meanwhile, the Japanese yen is leading among major currencies, reflecting a flight to safety amid uncertain market conditions.

Bonds Gain on Risk Aversion

The fixed-income market is witnessing increased demand as deteriorating sentiment supports bond prices. While German Bunds initially faced pressure due to fiscal-related developments, the overall risk-off tone has bolstered bond markets globally.

Commodities: Mixed Performance Across the Board

Crude oil is in consolidation mode, while precious metals are finding some support amid the cautious market mood. However, base metals are under pressure following the release of China’s Consumer Price Index (CPI) data, which has weighed on industrial demand expectations.

US Political Developments: Stopgap Funding Bill Introduced

In Washington, House Republicans have unveiled a stopgap funding bill aimed at keeping the government operational through September 30th. The proposal seeks to prevent a potential shutdown, though its passage remains uncertain amid political wrangling.

As the week unfolds, market participants will be closely monitoring developments across equities, currencies, bonds, and commodities to gauge the evolving risk landscape.