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Traders see gold as hedge against uncertainty, weaker dollar. The weakest jobless claims since October 2021 sent the dollar into a tailspin, benefitting gold. But also, given stocks have rallied significantly and many are still doubting the rally, traders are betting on gold as a portfolio hedge. 

Swiss retail sales in May disappointed strongly coming in at -3.7% versus expectations of -1.4%, suggesting Swiss consumption is much softer than previously thought. This is the weakest number since a year ago when retail sales also fell before rebounding in the summer month. Today's data gave a reason for traders to ditch the Swiss franc, which continued to weaken against the dollar. The next leg higher could take the USD/CHF to around 0.94. This is consistent with our trade idea, in which we wrote about in yesterday's weekly forex ideas.

US lawmakers are moving closer to a deal that would raise the debt limit for two years. While the deal is not quite closed yet, it appears that it's imminent within a few days. Markets may however somewhat sell off on the news of the deal, as these events tend to be priced-in in advance and traders often exit the trader after positive news. Today should see lighter volumes as traders may exit positions ahead of the long weekend. Also interesting to note that markets are now pricing a 4.96% year-end Funds rate, which means there are essentially zero interest rate cuts priced in the second half of this year.

US Treasury yields have rebounded with the 2-year rising for 10th sessions in a row. Markets are concerned about: the path of inflation and labor, the Fed, and the debt ceiling. Traders may also lighten up positions as we approach the long weekend, but for now, at least in the Nasdaq, investors are cheering Nvidia's massive jump post-earnings. 

Largest 20 S&P 500 stocks up to 41% of the index's market cap. The most since 2000, according to NDR Research. This means there are greater chances that if a few of these stocks disappoint or outperform, the market could see strong swings in either direction. This is also a warning sign as the index gets more concentrated. Yet the capital-weighted index has largely outperformed the equal-weight as Big Tech stocks surged since the start of the year.