The U.S. dollar weakened sharply Monday as disappointing ISM manufacturing data (50.3) deepened U.S. growth concerns. Risk sentiment deteriorated further following President Trump's criticism of Ukraine's stance in peace negotiations, fueling uncertainty and pressuring Treasury yields lower. The 2-year yield dropped below 4%, flattening the 2s-10s curve to +18.5bps. The S&P 500 fell over 1%, dragged by energy and tech sectors.

Euro Recovers Strongly, Sterling Gains Momentum

EUR/USD rebounded more than 1%, reversing recent losses as traders repositioned ahead of potential ECB easing and EU stimulus measures. However, resistance near the 100-day moving average (1.0417) limited gains. GBP/USD rose strongly toward the key resistance at its 100-day moving average (1.0417), supported by hawkish Bank of England comments on persistent inflation risks ahead of Wednesday's UK PMI data.

Yen Strengthens on Safe-Haven Demand

USD/JPY edged toward the critical 150 level as falling Treasury yields and weaker equities boosted yen demand. Further downside toward recent lows around 148.56 remains possible amid cautious sentiment and upcoming BOJ commentary.

Commodities Mixed as Oil Stabilizes, Gold Rallies

Gold prices jumped over 1%, benefiting from dollar weakness and geopolitical uncertainty. Oil pared earlier losses to close slightly lower, with traders assessing geopolitical developments. Copper eased modestly amid tariff concerns and growth uncertainty.

Market Outlook: Caution Dominates Ahead of Key Events

Markets remain volatile as investors await further signals from BOJ speeches, ECB policy announcements, and U.S. economic data later this week. Risk sentiment is cautious, supporting further yen strength and ongoing dollar vulnerability.