Kevin McCarthy, the Speaker of the U.S. House of Representatives, was removed from his position in a historic vote on January 3rd, 2023. This was the first time a speaker had been ousted by members of their own party since McCarthy angered some Republicans by striking a deal with Democrats to avoid a government shutdown. Congressman Matt Gaetz filed the motion to eject McCarthy after months of infighting between McCarthy and far-right Republicans. The House must now begin the process of selecting a new speaker, with Rep. Patrick McHenry named as interim speaker. For the time being, it is important to closely watch out for new speaker candidates and their standing.   

EQUITY

Wallstreet were gloomy on Tuesday, with the Dow turning negative for the year, as economic data reinforced expectations that the Federal Reserve would need to keep interest rates high. Surging bond yields weighed on stocks, with the 10-year Treasury yield hitting a 16-year peak above 4.8% after strong job opening data. McCormick fell the most after the company reported lower seasoning sales, while the magnificent 7 dragged the whole market with it, with Amazon losing 3.66%.

GOLD

Gold prices continued to decline on Tuesday, staying muted in the Asian session after hitting 7-month lows near $1,820 as long-term Treasury yields continued to rise. Additional factors like yen intervention speculation, solid US economic data, outflows from gold ETFs, and reduced safe haven buying have also weighed on prices. 

OIL

Crude oil recovered some of its Monday losses ahead of an OPEC+ meeting. Saudi Arabia is expected to raise prices again, while Russia has no timeline for ending its export ban. Stockpiles likely fell last week in the US, according to API data, despite high refinery runs maximising gasoline and diesel output. Iraq's pipeline restart plans and OPEC+'s output policy decision will be watched closely as to its next catalyst. 

CURRENCY

The yen jumped against the dollar on Tuesday, leading to speculation that Japan intervened to prop up its currency, although the smaller 2% move made some analysts doubtful. Japan has intervened before when the yen hit 32-year lows against the strong dollar in September and October 2022. With US job data coming Friday, policymakers may act again to curb yen weakness if the dollar strengthens further.