- Market sentiment remains cautiously optimistic despite the latest inaction.
- S&P500 Futures seek fresh clues to extend Monday’s rebound from one-week low.
- US Treasury bond yields consolidate the previous week’s rally amid downbeat inflation expectations, employment data.
- Hawkish Fed talks, US-China jitters are extra filters probing the momentum traders seeking fresh clues.
The risk profile appears unclear on early Tuesday, despite the likely cautious optimism, as market players struggle for fresh impulse amid a light calendar and a lack of major macros. Even so, the previous day’s downbeat clues about the US and China inflation join the last week’s downbeat US employment data to underpin the riskier assets.
Amid these plays, the S&P500 Futures seesaw around 4,445, up 0.05% intraday, while struggling to extend the previous day’s recovery from the lowest level since June 29. That said, the US Treasury bond yields remain pressured after reversing from the highest level since March on Monday. It should be noted that the benchmark US 10-year Treasury bond yields printed the first daily loss in July the previous day whereas the two-year counterpart declined for the second consecutive day, to respectively near 4.00% and 4.86%.
Additionally, the Asia-Pacific shares edge higher whereas the US Dollar Index drops to the fresh low in two months to around 101.85 at the latest, down for the fourth consecutive day as we write. Even so, the prices of Gold and Crude Oil remain dicey near $1,925 and $73.20 at the latest.
On Monday, the downbeat US inflation clues, as per the New York Federal Reserve’s (Fed) monthly inflation expectations survey, followed Friday’s disappointment from the headline US job numbers to push back the hawkish Fed concerns and drown the US Dollar. It should be observed that the latest US employment report for June marked a negative surprise and offered a big blow to the US Dollar, making it post the biggest daily loss in three weeks on Friday. However, the markets still expect a 0.25% rate hike in July and hence the risk-on mood appears elusive.
Additionally probing the traders was Monday’s softer prints of China inflation data that flagged fears of deflation in the world’s biggest industrial player. Furthermore, the US-China tension is also increasing and prods the market sentiment but the news of China’s additional stimulus for the real estate front at home seems to push back the bears.
Looking ahead, the UK job numbers and the second-tier sentiment figures from Germany may entertain the market players ahead of the key US Consumer Price Index (CPI), up for publishing on Wednesday.
Also read: Forex Today: Dollar slides further with focus on inflation data
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0800 after mixed US data
EUR/USD trades in positive territory above 1.0800 in the American session. The mixed macroeconomic data releases from the US limit the US Dollar's strength, while the strong inflation readings from Germany support the Euro, helping the pair push higher.
GBP/USD recovers toward 1.3000 as markets UK budget, US data
GBP/USD recovers toward 1.3000 from the daily lows it set below 1.2950 on Wednesday. Investors assess the UK Autumn Budget and the US data, which showed that the US economy expanded at a softer pace than expected in Q3.
Gold slowly but steadily approaching $2,800
Gold pulls away from the all-time-high it set near $2,790 earlier in the day and trades at around $2,780. With the US Dollar struggling to find demand after mixed macroeconomic data releases, however, XAU/USD's downside remains limited.
Bitcoin Price Forecast: Flirting with fresh all-time high
Bitcoin is close to its all-time high, making a high of $73,620 on Tuesday and correcting slightly afterward. US spot Bitcoin ETFs posted $827 million in inflows on Tuesday, the third largest single-day inflow since their launch in January.
German economy surprises in the third quarter
The German economy avoided a technical recession in the third quarter, showing unexpected growth. However, this does not change the fact that the economy remains stuck in stagnation.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.