Major assets kicked off the week on solid footing, likely driven by a mix of bargain hunting, easing global growth concerns, and positioning ahead of this week’s potential market movers.

Here are the major drivers and moves you may have missed in the previous trading sessions:

Headlines:

• Over the weekend, China’s State Council printed a “special action plan” to help boost domestic consumption
• Over the weekend, the U.S. launched airstrikes against Iran-backed Houthis in Yemen, vowing to continue until attacks on Red Sea shipping stop
• Over the weekend, U.S. Treasury Secretary Scott Bessent said there are “no guarantees” there won’t be a recession, adding that market corrections are “healthy” and “normal”
• New Zealand BusinessNZ Services PMI for February: 49.1 (50.7 forecast; 50.4 previous)
• China house price index for February: -4.8% y/y (-4.7% forecast; -5.0% previous)
• China industrial production for February: 5.9% y/y (5.0% forecast; 6.2% previous)
• China retail sales for February: 4.0% y/y (3.7% forecast; 3.7% previous)
• China fixed asset investment for February: 4.1% ytd/y (3.8% forecast; 3.2% previous)
• China unemployment rate for February: 5.4% (5.1% forecast; 5.1% previous)
• U.S. retail sales for February: 3.1% y/y (3.5% forecast; 4.2% previous); Core retail sales at 0.3% m/m (0.2% forecast; -0.4% previous)
• U.S. NY Empire State manufacturing index for March: -20.0 (2.0 forecast; 5.7 previous)
• U.S. business inventories for January: 0.3% m/m (0.2% forecast; -0.2% previous)
• U.S. NAHB housing market index for March: 39.0 (44.0 forecast; 42.0 previous)
• Canada housing starts for February: 229.0k (245.0k forecast; 239.7k previous)
• Canada foreign securities purchases for January: 7.91B (14.37B previous)

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView

Global financial markets showed resilience on Monday with most major assets posting gains despite economic concerns. Stock markets around the world continued their recovery for a second consecutive day, with the S&P 500 rising 0.6% and European indices advancing around 0.7%. Investors appeared willing to buy recent dips despite weaker-than-expected US retail sales that grew just 0.2% in February, well below forecasts.

China’s weekend announcement of a 30-point consumption stimulus plan provided tailwinds for markets, particularly benefiting commodities. This positive influence was reinforced by better-than-expected Chinese economic data showing retail sales and industrial production exceeding analyst expectations.

Treasury bonds initially attracted buyers seeking safety after the disappointing economic data but gave back gains as market sentiment improved. The benchmark 10-year yield ended almost unchanged at 4.30% as traders remained cautious ahead of the Federal Reserve’s meeting on Wednesday.

Gold continued its winning streak, climbing for a fifth straight session to reach the psychologically important $3,000 mark. The precious metal benefited from ongoing trade tensions and Middle East conflicts as investors sought traditional safe havens amid uncertainty about Trump’s upcoming tariffs.

WTI crude oil jumped to $68.00 before easing to $67.20, supported by geopolitical risks after U.S. airstrikes in Yemen and Trump’s warnings to Iran. Hopes for stronger demand following China’s stimulus also added to the upside. Meanwhile, bitcoin rose to $83,700 as optimism in Asia and improved risk sentiment in the U.S. boosted the OG crypto.

FX Market Behavior: U.S. Dollar vs. Majors:

Overlay of USD vs. Major Currencies Chart by TradingView

Early trading saw the dollar moving in mixed directions as markets reacted to China’s stronger-than-expected economic data. The Greenback held relatively steady while Asian markets processed China’s weekend announcement of a major consumption stimulus plan, though the longer-term impact remained uncertain.

As European trading got underway, signs of dollar softness started to emerge across most currency pairs, but price action stayed somewhat cautious ahead of the U.S. retail sales report.

The release of weaker-than-expected U.S. retail sales, which rose just 0.2% versus the 0.6% forecast, appeared to be a turning point. The dollar faced immediate selling pressure, which persisted throughout the U.S. session, as traders weighed the possibility of softer consumer spending affecting future Fed policy.

Despite broad dollar weakness, USD/JPY bucked the trend later in the session, spiking higher as equity markets extended their gains. This suggested that risk-on sentiment was in play, leading to a more aggressive sell-off in the safe-haven yen than in the dollar.

Commodity-related currencies benefited the most from dollar softness, with the New Zealand and Australian dollars climbing around 1.1% and 0.9%, respectively. The Greenback also weakened significantly against European currencies as traders seemed to increase their expectations for Fed rate cuts following the softer retail data.

Upcoming Potential Catalysts on the Economic Calendar:

• Switzerland SECO economic forecasts at 8:00 am GMT
• German ZEW economic sentiment at 10:00 am GMT
• Eurozone trade balance at 10:00 am GMT
• Eurozone ZEW economic sentiment at 10:00 am GMT
• Canada CPI reports at 12:30 pm GMT
• U.S. building permits and housing starts at 12:30 pm GMT
• U.S. import prices at 12:30 pm GMT
• U.S. industrial production at 1:15 pm GMT
• Australia CB leading index at 2:30 pm GMT
• New Zealand Westpac consumer sentiment at 8:00 pm GMT
• New Zealand current account balance at 9:45 pm GMT
• Australia MI leading index at 9:45 pm GMT
• Japan core machinery orders at 11:50 pm GMT
• Japan trade balance at 11:50 pm GMT

The European session could see increased EUR volatility as the German ZEW economic sentiment and Eurozone trade balance reports shake up EUR pairs, especially if the numbers are stronger or weaker than expected.

In the U.S., keep an eye on Canada’s inflation data, which could move CAD, while U.S. housing data, import prices, and industrial production may affect USD, along with any trade or geopolitical news that could shift market sentiment.

Don’t forget to check out our brand new Forex Correlation Calculator when taking any trades!