EURUSD
- EUR/USD fell by 0.25% to 1.0975, despite the European Central Bank slowing the pace of its interest rate increases.
- Eurozone inflation is expected to slow sharply this year, although price growth momentum remains high for now.
- The ECB has started to raise rates later than the Fed, which could drive a gradual rise in European currencies against the dollar shortly.
- The DXY, which tracks the dollar against six other currencies, traded 0.15% higher at 101.541 but remains not far from recent lows.
- The recent stronger-than-expected payroll release has indicated that the U.S. labor market remained resilient in April.
| SMA (1D) | Rising |
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| RSI (1D) | Falling |  |
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| MACD (1D) | Slightly Falling | |
Closing statement: The EUR/USD has experienced a slight dip, despite strong economic data from both the Eurozone and the U.S. The ECB's decision to slow the pace of interest rate increases may have influenced this dip, but there is still potential for a gradual rise in European currencies against the dollar soon. The market will continue to monitor economic indicators and central bank decisions for potential impacts on currency pairs.
GBPUSD
- The U.S. dollar gained strength in early European trade on Tuesday.
- GBP/USD traded flat at around 1.2608, just below the previous session's one-year peak of 1.2668.
- The Bank of England is expected to raise interest rates by another 25 basis points to 4.5% to combat inflation still running at double figures.
- U.S. inflation data, due on Wednesday, is expected to show that price pressures eased slightly in April from the prior month.
- Any signs of stubborn inflation could elicit a hawkish response from the Fed, which recently flagged a more data-driven approach to future rate hikes.
| SMA (1D) | Slightly Rising |
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| RSI (1D) | Slightly Falling | |
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| MACD (1D) | Neutral |
Closing statement:The GBP/USD is expected to remain volatile this week as the market awaits the Bank of England policy-setting meeting and U.S. inflation data, which could impact the future path of interest rate hikes in both economies.
GOLD
- Gold prices remained steady above key levels on Tuesday.
- Traders are awaiting more cues on the US economy from key inflation data due this week.
- Markets expect the Fed to likely pause its rate hike cycle, but any upside in gold is likely to be held back by interest rates remaining higher for longer.
- Other precious metals, such as platinum and silver, retreated slightly on Tuesday, while copper prices fell after logging strong gains over the past four sessions.
- Fed Fund futures prices data shows that markets are pricing in an 88% chance that the Fed will keep its rates on hold in June.
Closing statement: The gold market is keeping a close eye on inflation data this week, while traders await more information on the US economy. Despite expectations of a potential pause in the Fed's rate hike cycle, the possibility of interest rates remaining higher for longer may hold back any significant upside in gold prices.
CRUDE OIL
- Crude oil prices remained flat in early Asian trade on Tuesday due to cautious investor sentiment ahead of key U.S. inflation data and Chinese trade data.
- Prices rallied over 2% on Monday following the Federal Reserve survey of U.S. lending conditions that showed the collapse of several U.S. banks this year had not had a profound impact on loan activity.
- Further gains were limited as markets awaited fresh cues on the U.S. economy from the inflation data due on Wednesday, which is expected to show a decrease in U.S. inflation.
- Chinese trade data due later in the day may provide more cues on demand in the world’s largest oil importer, which has been a key weight on oil prices in recent weeks.
- Crude prices have been trading substantially down for the year.
| SMA (1D) | Falling | |
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| RSI (1D) | Slightly Falling | |
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| MACD (1D) | Neutral |
Closing statement: The flat range of crude oil prices in early Asian trade on Tuesday reflects cautious investor sentiment ahead of important economic data releases, including the U.S. inflation data and Chinese trade data, which could provide further cues on the health of the global economy and demand for crude oil.
DAX
- European stock markets are expected to open cautiously on Tuesday, as investors await the latest U.S. inflation report and the Bank of England’s policy-setting meeting while digesting the latest Chinese trade data.
- The DAX futures in Germany traded 0.13% lower, CAC 40 futures in France traded 0.34% lower, and the FTSE 100 futures contract in the U.K. fell 0.31%, with the U.K. financial markets returning from a public holiday.
- Positive earnings this quarter to date has benefited European equities, with results from the banking sector showing a degree of strength.
- The European Central Bank raised interest rates last week, and speeches from board members Philip Lane and Isabel Schnabel later today will be studied for clues of future action.
- The daily chart's RSI diverges negatively against the price, indicating a possibility of a downward reaction.
| SMA (1D) | Slightly Rising |
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| RSI (1D) | Slightly Falling | |
| MACD (1D) | Neutral |
Closing statement:Uncertainties around inflation, monetary policy, and economic data continue to drive cautious trading in European stock markets, with investors closely monitoring upcoming events and data releases for more clarity on the direction of the markets.