EURUSD
- EUR/USD in a Narrow Trading Band: The EUR/USD pair is struggling to capitalize on recent gains and is oscillating in a narrow trading band during the Asian session on Tuesday. This follows strong gains registered over the past two days.
- Divergent Views from Fed Officials: Atlanta Fed President Raphael Bostic said that it might be appropriate to lower the policy rate this summer.
- However, Chicago Fed President Austan Goolsbee disagreed with the idea of waiting for core inflation to reach 2% on a 12-month basis before considering rate cuts. Goolsbee advocated for rate adjustments to be tied to confidence in progress towards the target rate.
- Richmond Fed President Thomas Barkin expressed a different viewpoint, stating that he is not in a hurry to lower rates and even hinted that the Fed may not reduce rates at all this year.
- ECB Board Member's View on Easing Cycle: ECB Board member Peter Kazimir expressed a preference for commencing the bank's easing cycle in June. This viewpoint gained support after headline inflation figures in Germany and the broader Eurozone edged lower in February compared to still sticky core prints.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The EUR/USD pair is facing a narrow trading range, influenced by divergent views among Fed officials on the potential timing of rate cuts. The nuanced perspectives, along with ECB Board member Kazimir's preference for a June start to the easing cycle, contribute to the current dynamics. Traders are closely monitoring inflation figures for further insights into the trajectory of monetary policy for both the Fed and the ECB.
GBPUSD
- GBP/USD on Softer Note: GBP/USD is trading on a lighter note around 1.2675 during the early European session on Tuesday. The pair is experiencing a slight decline amid the modest recovery of the US Dollar.
- Limited UK Economic Calendar: The UK has a thin economic calendar this week, and traders are turning their attention to the upcoming US Nonfarm Payrolls (NFP) labor report on Friday. Investors are keenly assessing the timing of potential interest rate cuts by the Federal Reserve (Fed).
- UK BRC Like-For-Like Retail Sales: Tuesday's UK BRC Like-For-Like Retail Sales for the year ended February is anticipated to print at 1.6% YoY, compared to the previous figure of 1.4%.
- ISM Services Purchasing Managers Index (PMI): On the US side for Tuesday, the ISM Services Purchasing Managers Index (PMI) for February is forecasted to tick lower to 53.0 from the previous month's 53.4.
- Focus on US Labor Figures: US labor figures take the spotlight this week, with the ADP Employment Change scheduled for Wednesday and the highly anticipated NFP report on Friday.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD is experiencing a mild dip in the early European session, influenced by the US Dollar's modest recovery. With a limited economic calendar in the UK this week, attention is turning to key US labour figures, including the NFP report on Friday, as traders assess the potential impact on Federal Reserve interest rate decisions.
GOLD
- Gold Price Retracement: Gold price is retracing from fresh three-month highs, reaching $2,120 in the American session on Monday. The precious metal is experiencing a pullback from these elevated levels.
- China's Services PMI Data: China's Services Purchasing Managers' Index (PMI) unexpectedly fell to 52.5 in February, compared to the January reading of 52.7, as per the latest data published by Caixin on Tuesday.
- US Dollar Recovery Challenges: Despite the retracement in gold, the US Dollar's recovery appears elusive. The US Treasury bond yields continue to struggle, driven by increased expectations of a US Federal Reserve (Fed) interest rate cut in June.
- Jerome Powell's Testimony: Fed Chairman Jerome Powell is scheduled to testify before the US Congress’ House Financial Services Committee this week, addressing the Fed’s Semi-Annual Monetary Policy Report. Powell's remarks are closely watched for insights into the central bank's policy stance.
- Focus on ISM Services PMI: The immediate focus for gold traders is on the ISM Services Purchasing Managers' Index (PMI) from the US. This data release is expected to offer fresh impetus to the gold market.
Closing statement: Gold is undergoing a retracement from recent three-month highs, influenced by China's Services PMI data and ongoing dynamics in the US Dollar. With the US Federal Reserve's interest rate expectations in focus and Jerome Powell's testimony ahead, the gold market is awaiting the ISM Services PMI release for potential market-moving cues.
CRUDE OIL
- WTI Oil Price Decline: West Texas Intermediate (WTI) oil prices are experiencing a second consecutive session of decline, with prices hovering near $78.40 per barrel on Tuesday. The market is witnessing a downward trend.
- Ongoing OPEC+ Efforts: Despite ongoing efforts by OPEC+ countries, including Russia, to implement voluntary oil output cuts, Crude oil prices are facing downward pressure. These voluntary cuts are part of the collective effort to manage global oil supply.
- Saudi Arabia's Output Cut: Saudi Arabia, a key player in the oil market, has announced its intention to prolong its voluntary output cut of 1 million barrels per day. This decision aims to contribute to stabilizing and supporting oil prices.
- Output Reductions by Iraq and UAE: Iraq and the UAE have committed to continuing their output reductions. Iraq plans to reduce output by 220,000 barrels per day, while the UAE aims for a reduction of 163,000 barrels per day. Such agreements contribute to managing global oil supply levels.
- China's Economic Revamp: China, the world's largest Crude importer, has pledged to revamp its economy amidst sluggish growth post the COVID-19 pandemic. This economic transformation is anticipated to bolster fuel consumption, providing support to Crude oil prices.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI oil prices are under pressure, influenced by ongoing efforts by major oil-producing nations to manage output levels. Saudi Arabia's commitment to an output cut, along with similar agreements by Iraq and the UAE, reflects ongoing efforts to stabilize the oil market. Additionally, China's economic initiatives play a role in supporting the outlook for fuel consumption and oil demand.
DAX
- Sentix Investor Confidence: On Monday, investors closely watched Sentix Investor Confidence figures. The sentiment toward the Eurozone economy showed improvement in March, with the Sentix Investor Confidence Index climbing from -12.9 to -10.5. This positive shift in investor sentiment briefly supported the DAX.
- ECB Policy Decision: The focus on Monday remained on the upcoming European Central Bank (ECB) policy decision and press conference scheduled for Thursday. Investors were cautious ahead of these events, anticipating potential market impacts based on the ECB's decisions and statements.
- Finalized Services PMIs: On Tuesday, attention turned to the finalized Services Purchasing Managers' Index (PMI) for Germany and the Eurozone. Investors looked for any upward revisions, as these could signal changes in the economic landscape.
- Subcomponents and Wages: Investors must pay attention to subcomponents of the PMI data, including prices and wages. Higher wages could influence the timeline for a potential ECB rate cut. The services sector's role as a major contributor to euro area inflation makes its performance crucial.
- Producer Prices for Eurozone: In the context of inflation, producer prices for the Eurozone were also on the radar. Changes in producer prices reflect adjustments based on the demand environment, providing insights into inflationary pressures.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX experienced market dynamics influenced by improved sentiment toward the Eurozone economy, but caution prevailed as investors awaited the ECB policy decision. The finalized Services PMI data and its subcomponents, along with producer prices, were key factors influencing investor decisions in the Eurozone market.