Treasury yields signal prolonged Fed tightening
Fed tightening weighs on EUR/USD and metals, while oil eyes China and Russian sanctions

The euro faces continued pressure
Sanctions and China’s strong trade performance contribute to a complex oil market outlook
Precious metals see limited upside
US Markets
US Treasury yields surged recently, fueled by concerns over the Federal Reserve maintaining restrictive policies through 2025. Two key factors supporting this outlook include:
- Donald Trump’s presidency beginning in January, potentially signaling a return to protectionist economic policies.
- Renewed inflation risks, driven in part by anticipated shifts in fiscal and trade strategies.
These dynamics continue to attract investor attention, heightening the appeal of safer, income-generating assets.
EUR/USD
The Euro slipped below 1.02, marking its weakest level since November 2023, as stronger-than-expected US employment data reshaped expectations for Federal Reserve rate policy. Analysts now anticipate fewer rate cuts, with Goldman Sachs projecting the euro could fall to 0.97 in the next six months.
Commodities
Energy Markets
Heightened concerns over Russian oil supply emerged following new US sanctions targeting Russian crude exports and affiliated firms.
China's Role:
China’s record-breaking trade surplus of $990 billion and robust December trade figures boosted market optimism. As the second-largest global oil consumer, China’s economic resilience could lend support to oil demand, offsetting some supply-side uncertainties.
Impact of Sanctions:
The sanctions could disrupt Russian exports by up to 1 million barrels daily, though the rapid implementation timeline may limit their immediate effect on global oil flows.
Precious Metals
Gold
Gold prices stabilized during early Asian trading, benefiting from a modest decline in Treasury yields. Reports suggest a measured approach to tariff adjustments under the new administration, easing inflationary fears and supporting the non-yielding asset. However, expectations for a hawkish Fed may limit significant upward momentum.
Silver
Silver struggled to build on previous gains and remains under technical pressure. A sustained breakout beyond $30.50-$30.55 would be necessary to shift its bearish outlook to bullish.