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Key points:
Elevated global bond yields and sticky inflation seen as key headwinds for risk assetsNvidia, Walmart and Target earnings viewed as critical tests for tech versus Main Street resilienceOil prices expected to retain upside bias; gold seen range‑bound while copper outperforms
Rising global bond yields and sticky inflation are central concerns for Tim Waterer from KCM Trade, who views current levels in US 10‑year Treasury yields around 4.5–4.6% as uncomfortable for markets and the White House alike. Waterer suggests elevated yields, alongside higher German bunds, JGBs and UK gilts, are tightening financial conditions and could restrain both economic and corporate growth. In his view, persistent inflation near 3.8% in the United States leaves the next move from the Federal Reserve more likely to be a hike than a cut, which he argues may pressure equities if yields stay high.
Waterer highlights a pivotal US earnings week, featuring Nvidia ($NVDA), Walmart ($WMT) and Target ($TGT). He expects Nvidia to deliver another strong quarter, potentially near 80% revenue growth, but warns the stock could still face selling even on a beat. By contrast, he anticipates more modest earnings-per-share growth of around 6–8% for Walmart, yet considers any resilience in the US consumer sector important for sustaining market momentum.
On commodities, Waterer sees an upside bias for crude, contending Brent could revisit $115–$120 if the Strait of Hormuz disruption persists. He describes gold as range‑bound for now, capped by high yields and a strong US dollar, while copper outperforms on perceived industrial demand. For the Australian dollar, he flags RBA minutes and local jobs data as potential catalysts, but maintains that higher US yields are currently keeping it below US$0.72.
