Asian shares fell 0.5% and Nasdaq 100 Index futures tumbled as much as 1%. The dollar strengthened against most of its Group-of-10 peers, especially against the Japanese currency, after the nation’s prime minister commented that a weak yen can be a huge opportunity for export industries. That followed the greenback’s strongest day since May on Friday after President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair.
Gold dropped over 2%, extending its drop after suffering the biggest slide in more than a decade on Friday. Silver slipped lower after its record 26% plunge on the last trading day of January. Bitcoin edged higher in early Asian trading after sliding below $76,000 in thin weekend trading — revisiting levels last seen during the fallout from Trump’s “Liberation Day” tariffs last year.
Taken together, the moves indicated lackluster sentiment heading into a busy week that includes rate decisions by the central banks of Europe and the UK, a US jobs report and a heavy slate of corporate results. Global markets on Friday adjusted positions to pare back expectations for a policy easing under Warsh.
“The total collapse in precious metals prices shows that any market can become gripped by mania,” Kyle Rodda, a senior analyst at Capital.com, wrote in a note. “Given the build up of positioning and leverage involved, the sell-off is bleeding into other markets. Effectively, a deleveraging is happening.”
Friday gains for the dollar reflected not just ructions in precious metals, but also that the prospect Trump’s Fed chair pick may not be as dovish as many had anticipated.If confirmed by the Senate, the former Fed governor will succeed Jerome Powell when his term ends in May. Warsh, 55, aligned himself with Trump in 2025 by arguing publicly for lower rates, going against his longstanding reputation as an inflation hawk. The US president said Friday he had not asked Warsh to commit to cuts.“Markets may price in a modest acceleration of rate cuts, but an aggressive easing cycle appears unlikely,” said Jason Pride at Glenmede.
The Warsh pick should help stabilize the dollar some and reduce, though not eliminate, the asymmetric risk of deep extended US currency weakness by challenging “debasement” trades — which is also why gold and silver are sharply lower, according to Krishna Guha at Evercore.
“But, we advise against overdoing the Warsh hawkish trade across asset markets – and even see some risk of a whipsaw,” Guha said. “We see Warsh as a pragmatist, not an ideological hawk in the tradition of the independent conservative central banker.”
Elsewhere in commodities, OPEC+ ratified plans to keep production steady in March — the last part of a three-month supply freeze, even after prices hit a four-month high on the prospect of a US strike against Iran.
Meanwhile, Indian equities slumped on Sunday after the government said it plans to raise taxes on equity derivatives trades, doubling down on efforts to curb speculative activity among retail investors.
Also, the US government stumbled into a partial shutdown Saturday while waiting for the House to approve a funding deal Trump worked out with Democrats following a national uproar over Border Patrol agents’ killing of a US citizen in Minneapolis.
