Traders flocked to safety on Tuesday, with precious metals like gold being the main beneficiary of risk-off flows.

Meanwhile, rising U.K. bond yields also took center stage, highlighting U.K. government spending concerns and further stoking safe-haven rallies.

Check out the headlines and economic updates you may have missed in the latest trading sessions!

Headlines:

• New Zealand Terms of Trade for June 30, 2025: 4.1% q/q (1.4% q/q forecast; 1.9% q/q previous)
  • New Zealand Import Prices for June 30, 2025: -3.7% q/q (2.3% q/q forecast; 5.1% q/q previous)
  • New Zealand Export Prices for June 30, 2025: 0.2% q/q (3.0% q/q forecast; 7.1% q/q previous)
• Australia Net Exports Contribution to GDP for June 30, 2025: 0.1% (0.2% forecast; -0.1% previous)
• Australia Current Account for June 30, 2025: -13.7B (-14.4B forecast; -14.7B previous)
• Secretary General of Japan’s ruling LDP party, Hiroshi Moriyama, announced his intention to step down, along with General Council Chairperson of the party, Shunichi Suzuki
• BOJ official Himino: Further rate hikes warranted but timing remains unclear
• Euro area Consumer Price Index Growth Rate Flash for August 2025: 2.1% y/y (2.1% y/y forecast; 2.0% y/y previous); 0.2% m/m (0.2% m/m forecast; 0.0% m/m previous)

• U.K. long-term gilt yields surged to record levels, 30-year yield up to 5.68% – highest level since 1998
• ECB official Schnabel says she doesn’t see the need to lower rates further now
• ECB official Simkus also noted that there is no reason to adjust rates in the meantime
• Canada S&P Global Manufacturing PMI for August 2025: 48.3 (46.8 forecast; 46.1 previous)
• ECB official Muller mentioned that it makes sense to keep policy on hold for now and keep close tabs on economy
• U.S. S&P Global Manufacturing PMI Final for August 2025: 53.0 (53.3 forecast; 49.8 previous)
• U.S. Construction Spending for July 2025: -0.1% m/m (0.1% m/m forecast; -0.4% m/m previous)
• U.S. ISM Manufacturing PMI for August 2025: 48.7 (48.2 forecast; 48.0 previous)
  • U.S. ISM Manufacturing Employment for August 2025: 43.8 (43.2 forecast; 43.4 previous)
  • U.S. ISM Manufacturing New Orders for August 2025: 51.4 (48.0 forecast; 47.1 previous)
  • U.S. ISM Manufacturing Prices for August 2025: 63.7 (65.5 forecast; 64.8 previous)
• U.S. RCM/TIPP Economic Optimism Index for September 2025: 48.7 (51.0 forecast; 50.9 previous)
• U.S. President Trump confirmed that they will be taking the tariffs case to the Supreme Court to rule on their legitimacy

Broad Market Price Action:

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

Markets didn’t exactly seem hungry for risk for the most part of the day, as traders grappled with political uncertainty, trade jitters and rising global bond yields.

Gold continued its ascent from the previous day, surging close to the $3,500 mark during the Asian session before briefly pulling back then extending its climb to fresh record highs around $3,538 later in the day.  It’s highly likely that gold continue to be driven by a combination of Fed rate cut expectations and continued concerns around central bank independence.

Bitcoin, which was off to a rough start, quickly got back on its feet a few hours into the Asian session to recover to $110K levels then resumed its rally to the $111,500 region before U.S. markets closed. Based on its ability to buck the risk-off vibes, the cryptocurrency appeared to benefit from its role as an alternative store of value amid questions about traditional market stability, specifically bonds.

U.S. equities, on the other hand, kicked off on a bearish note as European indices also closed in the red on account of bond market concerns & rising bond yields. U.S. President Trump confirmed that the administration will be taking the tariffs case to the Supreme Court to rule on the legitimacy of his drastic trade policy changes.

Meanwhile, U.S. Treasury yields also stayed mostly in positive territory while safe-haven demand and the dollar remained elevated. Earlier in the day, U.K. long-term gilt yields surged to record levels, highlighting government spending woes and putting more pressure on Chancellor Reeves to adjust fiscal plans.

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

Overlay of USD vs. Majors Chart by TradingView

Dollar bulls were off to a tentative start but soon picked up on momentum a few hours into the Asian session while risk aversion made its way into the markets.

USD/JPY shrugged off relatively hawkish commentary from BOJ official Himino, who indicated that further rate hikes are warranted but that the timing remains unclear. Traders seemed to be more focused on political uncertainty in the country, as Japan’s top LDP officials are expressing intentions to step down after the party’s crushing election defeat.

USD rallies accelerated as soon as London markets opened, with traders reacting to rising global bond yields and undergoing some anxiety ahead of Trump’s scheduled announcement. Sterling took the largest hits, as long-term U.K. gilt yields surged to record highs, while the euro barely drew support from an upbeat flash core CPI figure.

A bit of profit-taking spurred a pullback leading to the release of the U.S. ISM manufacturing PMI, which came in slightly below consensus and triggered a shallow rebound for the dollar. Still, USD closed higher across the board thanks to safe-haven flows, limiting its gains versus CAD (+0.19%) while catching its biggest winnings against GBP (+1.16%) and JPY (+1.19%)

Upcoming Potential Catalysts on the Economic Calendar

• ECB President Lagarde’s Speech at 7:30 am GMT
• U.K. BoE Mann’s Speech at 7:30 am GMT
• Germany HCOB Services PMI Final at 7:55 am GMT
• RBA Governor Bullock’s Speech at 8:00 am GMT
• Euro area HCOB Services PMI Final at 8:00 am GMT
• BoE official Breeden’s Speech at 8:15 am GMT
• U.K. S&P Global Services PMI Final at 8:30 am GMT
• Euro area PPI at 9:00 am GMT
• New Zealand Global Dairy Trade Auction coming up
• Canada Labor Productivity at 12:30 pm GMT
• Fed official Musalem’s Speech at 1:00 pm GMT
• U.S. Factory Orders at 2:00 pm GMT
• U.S. JOLTs Job Quits & Openings at 2:00 pm GMT
• Fed official Kashkari’s Speech at 5:30 pm GMT
• U.S. Fed Beige Book at 6:00 pm GMT
• U.S. API Crude Oil Stock Change at 8:30 pm GMT

With investors adjusting positions ahead of the U.S. NFP release this Friday, upcoming jobs-related indicators such as the U.S. JOLTS job openings data and Fed Beige Book could provide major clues on how the official employment report could turn out.

Also keep your eyes and ears peeled for central bank commentary, particularly from Fed officials Musalem and Kashkhari, since their insights could impact monetary policy expectations and risk behavior.

As always, look out for global trade developments and geopolitical headlines that could influence overall market sentiment. Stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!