US inflation expectations jump to two-week top

Anil Panchal FXStreet

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, extend the recovery moves from the last Thursday while flashing 2.38% by the end of Wednesday’s North American session. In doing so, the risk barometer jumps to the highest in two weeks while underpinning the tapering concerns.

It’s worth mentioning that the gauge of sentiment challenges the lower high bearish formation established since July 29, suggesting further support to the US Federal Reserve (Fed) tapering chatters should it break the resistance.

Also favoring the concerns over the dialing back of the Fed’s easy money policies were the latest comments from the US central bankers. St. Louis Fed Bank President James Bullard and New York Fed Bank President John Williams backed tapering in 2021 whereas Dallas Federal Reserve Bank President Robert Kaplan makes the case for an October taper despite cutting on Q3 GDP due to covid.

In addition to the Fed taper woes, coronavirus fears and the pre-ECB sentiment may also back the risk-off mood, which in turn support the US dollar’s safe-haven demand.

Read: US Dollar Index Price Analysis: DXY restores the run-up to 93.20

Moving on, market players are likely to remain cautious, mostly keeping the latest risk-aversion wave, ahead of the key European Central Bank (ECB) monetary policy meeting. Also important will be the weekly US job numbers and headlines concerning the coronavirus as well as the US stimulus.

Read: European Central Bank Preview: Taper on the table, but don’t get too excited about it

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.