Market Roundup
• US NFIB Small Business Optimism (Jun) 91.5,90.3 forecast, 90.5 previous
• US Redbook (YoY) 6.3%, 5.8% previous
Looking Ahead Economic Data (GMT)
•01:30 China Jun PPI (YoY) -0.8% forecast -1.4% previous
•01:30 China Jun CPI (MoM) -0.1% forecast, -0.1% previous
•01:30 China Jun CPI (YoY) 0.4% forecast, 0.3% previous
•01:30 Australia May Building Approvals (MoM) 5.5% forecast, -0.3% previous
•01:30 Australia May Private House Approvals 2.1% forecast, -1.6% previous
•02:00 New Zealand RBNZ Interest Rate Decision: 5.50% forecast, 5.50% previous
Looking Ahead Events And Other Releases (GMT)
• 02:00 New Zealand RBNZ Rate Statement
Currency Summaries
EUR/USD: The euro edged lower on Tuesday as dollar gained as Powell did not give a clear signal the U.S. central bank is close to cutting rates even as he acknowledged progress in inflation.Fed Chair Jerome Powell said in congressional testimony on Tuesday that inflation remains above the Fed's 2% target, but has been improving in recent months and more good data would strengthen the case for central bank interest rate cuts.Focus now shifts to the consumer price index (CPI) data on Thursday, with recent numbers showing a cooling from unexpectedly high levels at the start of the year. Traders currently see about a 75% chance of a rate cut in September, according to the CME Group's FedWatch Tool, opens new tab.. Immediate resistance can be seen at 1.0840(23.6%fib).), an upside break can trigger rise towards 1.0863 (Higher BB).On the downside, immediate support is seen at 1.0799 (38.2%fib), a break below could take the pair towards 1.0762 (50%fib).
GBP/USD: The pound declined on Tuesday after Federal Reserve Chair Jerome Powell acknowledged progress in inflation and a cooling job market, but did not give a clear signal that the U.S. central bank is close to cutting interest rates.Powell said that inflation "remains above" the U.S. Federal Reserve's 2% target, but has been improving in recent months and "more good data would strengthen" the case for central bank interest rate cuts.In remarks to Congress, he also noted that the job market has cooled, adding that "we now face two-sided risks," and can no longer focus solely on inflation.But Powell stopped short of offering the dovish view of the economy that some market participants were looking for. Immediate resistance can be seen at 1.2822(23.6%fib), an upside break can trigger rise towards 1.2852(Higher BB).On the downside, immediate support is seen at 1.2754(38.2%fib), a break below could take the pair towards 1.2693(50%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday as U.S. Federal Reserve Chair Jerome Powell assured the U.S. Congress that the economy was no longer overheated, raising hopes of a rate cut. Investors will also focus on U.S. consumer prices data due on Thursday, which can further support rate-cut bets after last week's softer jobs data. Oil prices slipped on Tuesday after a hurricane that hit a key U.S. oil-producing hub in Texas caused less damage than markets had feared, easing concerns over supply disruption.U.S. crude settled down 1.12% or 92 cents at $81.41 a barrel and Brent finished at $84.66 per barrel, down 1.27% or $1.09 on the day. The loonie was trading 0% higher at C$1.363 to the greenback , after trading in a range of 1.3629 to 1.3648. Immediate resistance can be seen at 1.3650(38.2%fib), an upside break can trigger rise towards 1.3685(50%fib).On the downside, immediate support is seen at 1.3606(23.6% fib), a break below could take the pair towards 1.3583(Lower BB).
USD/JPY: The dollar edged higher on Tuesday after U.S. Federal Reserve Chair Jerome Powell said more good data would strengthen the case for rate cuts but gave no hints on the timing for easing.Powell appeared to show increasing faith that inflation would return to the Fed's target and pointed to risks to the job market and the economy if interest rates stay too high for too long, but said he was not sending a signal on timing on day one of his two-day testimony in Congress. Traders are now baking in a roughly 70% probability that the Fed's first rate cut would come in September, down slightly from 71% on Monday, according to CME Group's FedWatch tool. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.13% to 105.11.Against the Japanese yen , the dollar strengthened 0.29% to 161.28.Strong resistance can be seen at 161.29(23.6%fib), an upside break can trigger rise towards 162.00(Psychological level).On the downside, immediate support is seen at 160.01 (38.2%fib), a break below could take the pair towards 158.78(50%fib).
Equities Recap
European shares dropped for a third straight session on Tuesday, dragged down by weakness in French stocks as political uncertainties lingered, while investors analysed Federal Reserve Chair Jerome Powell's testimony.
UK's benchmark FTSE 100 closed down by 0.66 percent, Germany's Dax ended down by 1.34 percent, France’s CAC finished the day down by 1.56 percent.
The S&P 500 and Nasdaq notched record-high closes on Tuesday, fueled by gains in Nvidia after U.S. Federal Reserve Chair Jerome Powell told lawmakers that more "good" economic data would strengthen the case for rate cuts.
Dow Jones closed down by 0.13% percent, S&P 500 closed up by 0.07 , Nasdaq settled up by 0.15% percent.
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Commodities Recap
Gold prices eked out gains on Tuesday despite a stronger dollar and higher bond yields, as investors looked forward to the U.S. June inflation data due later this week for more clarity on the U.S. interest rate path.
Spot gold rose 0.2% to $2,363.64 per ounce as of 14:35 p.m. ET (1835 GMT), after dropping more than 1% in the previous session. U.S. gold futures settled about 0.2% higher to $2,367.90.
Oil prices eased more than 1% on Tuesday after traders learned that prolonged supply disruptions from Hurricane Beryl were unlikely after a U.S. oil-producing hub in Texas suffered less storm damage than feared.
Brent crude futures settled at $84.66 a barrel, falling $1.09 a barrel, or 1.3%. U.S. crude settled at $81.41 at, losing 92 cents, or 1.1%.
