Trading week opens with mixed signals

As a new trading week kicks off, investors are navigating a mixed landscape shaped by diplomatic developments, central bank policy expectations, and fresh PMI readings across major economies. Here's how the markets are shaping up this Monday:

Currencies

The Japanese yen continued to slide for a third session, weighed down by an unexpected downturn in domestic economic activity. March’s flash PMIs showed a sharp dip in both manufacturing (48.3) and services (49.5), missing expectations and marking a notable shift from the prior month’s figures.

A stronger appetite for risk and lingering policy divergence between the Bank of Japan and the US Federal Reserve further limited demand for the safe-haven yen, with USD/JPY inching higher as a result.

The Australian dollar saw renewed buying interest following a solid improvement in domestic business activity. Early PMI prints for March showed a notable recovery, with manufacturing climbing to 52.6 and services hitting 51.2. New business and order flows surged at the fastest pace since mid-2022, suggesting resilient demand despite broader global headwinds.

The euro regained traction against the US dollar in early European trade on Monday, climbing toward 1.0850. After three straight days of losses, the pair found support as the greenback faced renewed pressure from trade policy uncertainty and economic growth concerns. Investors are eyeing upcoming Eurozone and US PMI figures.

COMMODITIES

Gold prices hovered above the $3,000 threshold on Monday, posting modest losses for a third consecutive session. Easing fears over the scope of new US tariffs - amid speculation they may be less severe than first anticipated - helped lift broader market sentiment, reducing demand for defensive assets. Still, lingering uncertainty around trade policy and geopolitical risks has kept downside momentum in check.

Traders remain cautious ahead of this week’s PMI readings and Friday’s PCE inflation data from the US, which could shape expectations for the Fed's next move.

Silver prices recovered some ground during Asian trading hours, edging up above $33 per ounce.

WTI crude extended its decline into a second day, trading near $68 per barrel in early Monday trade. The downward move followed headlines over the weekend suggesting potential progress in US-Russia diplomatic talks regarding Ukraine. Markets interpreted the development as a possible precursor to increased Russian oil exports, tempering near-term supply concerns and capping crude’s recent rally.