Disappointing GDP data from the euro area has sparked a rally in government bonds, with German Bunds leading the charge as traders anticipate potential interest-rate cuts from the European Central Bank. This has resulted in a 6 basis point drop in German 10-year yields to 2.52%. The expectation of lower rates has also buoyed European stocks, which reached new record highs, driven by gains in real estate, chemical, and technology sectors. Meanwhile, Nasdaq 100 futures have outperformed their S&P 500 counterparts, bolstered by positive premarket movements in Meta, IBM, and Tesla.
In the US, Treasury yields have also fallen, with the 10-year yield down 2 basis points to 4.51%, reflecting similar rate cut expectations. This has contributed to a slight decline in the Bloomberg Dollar Spot Index and a rise in the yen, which tops the G-10 FX leaderboard. The weaker dollar has improved purchasing power for non-dollar-denominated assets, boosting demand for Bitcoin, which has risen 1.5% to over $105,000. Gold prices have also benefited, climbing $20 to approximately $2,779 per ounce.
Oil prices have declined, with WTI down 0.5% at $72.30 a barrel, influenced by the strengthening yen and softening economic data from the eurozone, which may signal slowing demand. Brent crude, represented by the CO1 contract, is currently priced at $75.35 as of 05:51 on January 30, slightly down from its last close of $75.61.