Opening Bell: USD, Yields Rally; Gold Hits 2018 Low; Futures Higher

Japan’s TOPIX slid 0.1 percent lower, after gaining almost 0.25 percent and fluctuating intraday. Prices are displaying signs of weakness, with today’s Shooting Star confirming Friday’s Hanging Man.

China’s Shanghai Composite added 0.65 percent to Friday’s rally on a rising gap, to bag a combined 1.9 percent gain. Shares listed on Hong Kong’s Hang Seng climbed 0.6 percent, retracing from an initial 1.45 percent jump.

South Korea’s KOSPI gained 0.2 percent, rebounding from a 0.5 percent loss and posting a two-day advance of 0.7 percent.

Australia’s S&P/ASX 200 ticked 0.1 percent higher, then dropped 0.25 percent to settle at minus 0.05 percent—posting a three-day decline of 0.40 percent.

The global equity rally seen this morning highlights investor willingness to bid prices up on the cease fire of the US-China trade tiff, after it weighed on shares this past Friday amid mixed signals on the ongoing trade issue. Safe haven assets performed unevenly on Friday; investors bought into Treasurys (thereby pushing yields back below 3.1 percent) but sold off the yen and gold.

Other geopolitical factors weighing on investors: South Korean president Moon Jae-in’s visit to Washington to discuss North Korea, and ongoing Brexit negotiations. However, since the Brexit referendum in June 2016, investors have preferred to focus on what they consider more relevant, or perhaps understand better—the economy. Market focus will therefore shift to minutes of the Fed's May monetary policy meeting on Wednesday, along with preliminary eurozone PMIs.

The dollar extended gains to its highest price since mid-December 2017 after Mnuchin’s statements, further helped by a tumbling euro, which hit its the lowest level year-to-date after Italy’s two populist parties unveiled their proposals for the country's next prime minister.

Technically, the EUR/USD is testing the December 12, 1.1718 support. Should It break that level, it would find no support until the November 7, 1.1553 level.

With the dollar strengthening again, emerging market currencies continue to be under pressure. The Turkish lira tumbled 1.1 percent and Indonesia's rupiah weakened, as the country's central bank vowed to continue to intervene in the forex and bond markets and an interest-rate hike last week failed to prevent a selloff. The Malaysian ringgit dropped for a ninth day—on course for its longest losing streak since November 2016.

Gold dropped to the lowest level this year, extending the penetration of a double-top neckline, implying a revisit to the $1,240 level.

US oil futures hit $72.00 and are headed for their highest close in more than three years, after the trade war pause boosted investor risk appetite. However, the stronger dollar is currently pushing prices back down to $71.72, extending a consolidation to its 8th day.