Bond Yields Tumble Across the Curve as Precious Metals Shine

Market Overview

Markets traded sideways on Monday, with the Nasdaq and S&P 500 hitting fresh intraday highs before paring gains by the close. Investor sentiment was weighed by anticipation of upcoming earnings reports from companies like Google and Tesla, as well as ongoing concerns over tariffs.

Tech stocks outperformed, led by a 2.7% rally in Google. Meanwhile, U.S. Treasury yields fell across the board, with the 10-year yield dropping more than 3 basis points. In the FX market, the dollar weakened by 0.6%, revisiting last week's lows, while the Japanese yen gained over 1% against the greenback.

The softening dollar boosted precious metals: gold rose nearly 1.5%, briefly reclaiming the $3,400/oz level, while silver surged more than 2%, approaching last Mondays high.

Key Market Watch: What to Expect

● Criminal Allegations Against Fed Chair Powell

On Monday, Fox News Digital reported that Rep. Anna Paulina Luna (R-FL) sent a letter to the U.S. Department of Justice accusing Federal Reserve Chair Jerome Powell of committing perjury on two occasions, urging criminal charges. Perjury in the U.S. carries a maximum sentence of five years in prison and potential fines.

Meanwhile, economic advisor Bessent told former President Trump that Powell‘s removal may be unnecessary given the current strength of the economy and favorable market reaction to Trump’s policies. He also noted that the Fed has already signaled the potential for two rate cuts by year-end—aligning with Trumps agenda.

● End of the Road for Japans Ishiba？

With inflation eroding purchasing power, discontent—particularly among younger voters—has been growing in Japan, fueling support for populist minor parties. Following recent election losses, speculation is mounting that Shigeru Ishiba could soon join the list of Japans short-tenure “revolving door” prime ministers, potentially serving less than a year.

Facing mounting calls to resign, Ishiba is attempting to buy time through high-stakes trade talks with the Trump administration, particularly regarding auto tariffs. Historically, Japanese PMs who lose the upper house majority tend to resign within two months. Markets are already discussing possible successors, with younger leaders like Shinjiro Koizumi seen as rising stars.

Events to Watch (GMT+8)

• 20:30 – Fed Chair Jerome Powell delivers welcome remarks at a regulatory conference

• 22:00 – U.S. Richmond Fed Manufacturing Index for July