EURUSD
- Stable Gains Below 1.0950: EUR/USD is maintaining minor gains below the 1.0950 level in Tuesday's European trading. This positive movement is attributed to renewed weakness in the US Dollar, coupled with lower US Treasury bond yields, which is providing support to the currency pair.
- Expectations of Easing Cycles: Both the Federal Reserve (Fed) and the European Central Bank (ECB) are anticipated to initiate their easing cycles early in the summer, with June being the projected timeline. The divergence in the pace of subsequent interest rate cuts is a key consideration that could influence market dynamics.
- Comparing Fed and ECB: While both central banks are expected to embark on easing cycles, the potential difference in the speed of interest rate cuts is a point of interest. The ECB, according to current indications, is not expected to lag significantly behind the Fed. This nuanced distinction could impact the EUR/USD pair.
- ECB's Inflation Concerns: ECB Board member P. Kazimir emphasized on Monday that despite a decline in inflation, the desired target has not yet been reached. This suggests that inflation concerns remain a central focus for the ECB, influencing their policy decisions.
- Stagnant Euro Area vs. Resilient US Economy: The overall assessment suggests that the fundamentals of the euro area are relatively stagnant compared to the robust resilience of the US economy. This dynamic supports the notion of a stronger US Dollar in the medium-term horizon.
| 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: EUR/USD is experiencing modest gains against the backdrop of a weakening US Dollar and lower US Treasury bond yields. The expectation of easing cycles from both the Fed and the ECB, with attention to the speed of interest rate cuts, will likely be a determining factor for the currency pair. ECB's emphasis on inflation and the comparison between the economic conditions of the euro area and the US contribute to the outlook of a potentially stronger US Dollar in the medium term.
GBPUSD
- Consolidation near 1.2800: GBP/USD is currently trading in a sideways manner, hovering near the 1.2800 level in the early European session on Tuesday. The currency pair appears to be in a phase of consolidation.
- UK Unemployment Data: The latest data from the UK indicates that the ILO Unemployment Rate has inched higher to 3.9% from the previous 3.8%. This uptick in unemployment has posed a challenge for the Pound Sterling, hindering its ability to gain bullish momentum.
- Claimant Count Change: The report further reveals that the number of people claiming jobless benefits increased by 16.8K in February. This marks a notable rise compared to the gain of 3.1K reported in January, suggesting a less favorable situation in the UK labor market.
- Earnings Data: Average Earnings excluding Bonus in the UK recorded a 6.1% 3M YoY growth in January. However, this figure represents a slight decrease from December's 6.2% increase. The outcome fell short of market expectations, which anticipated a 6.2% growth.
- Upcoming US Inflation Data: Looking ahead, the focus shifts to the United States, where the annualized Consumer Price Index (CPI) is projected to remain steady at 3.1%. Core YoY CPI is expected to come in at 0.3%, a slight decrease from the previous 0.4%.
| 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: GBP/USD is consolidating around the 1.2800 level in the wake of UK employment data that showed a rise in the unemployment rate and an increase in jobless benefit claims. The less-than-expected growth in UK earnings also contributed to the Pound's challenges. Attention now turns to the upcoming US inflation data, which could introduce further dynamics to the currency pair.
GOLD
- Gold's Consolidative Mode: Gold is experiencing a drop for the first time in ten trading days, although it remains in a consolidative mode, hovering near the $2,180 level.
- Correction from All-Time Highs: The correction in gold's price follows its surge to all-time highs at $2,195. This correction is supported by a pause in the downtrend of the US Dollar and the stabilization of US Treasury bond yields.
- US Consumer Price Index (CPI): Investors are closely watching the annual US CPI, which is expected to rise by 3.1% in February, maintaining the same pace as seen in January. Core inflation, excluding volatile items, is anticipated to ease from 3.9% in January to 3.7% YoY in the reported period.
- Impact of CPI Data: A downside surprise in the monthly headline and core CPI inflation figures could potentially signal a June interest rate cut by the US Federal Reserve (Fed). This scenario could trigger a fresh sell-off in the US Dollar, providing additional support for gold and potentially propelling its price to new record highs.
- Market Sentiment: Ahead of the US CPI release, gold is likely to maintain a cautious trading momentum. The overall risk sentiment in the market is described as slightly upbeat.
Closing statement: Gold, after reaching all-time highs, is currently undergoing a corrective phase, influenced by factors such as a stable US Dollar and the awaited US CPI data. The potential impact of a June interest rate cut by the Fed, depending on CPI outcomes, is a key consideration for gold traders. The cautious trading momentum is expected to persist in the run-up to the CPI release.
CRUDE OIL
- WTI Oil Price Movement: The West Texas Intermediate (WTI) oil price is currently hovering around $78.30 per barrel during the Asian trading hours on Tuesday.
- Subdued Crude Oil Markets: Crude oil markets are currently subdued, with traders awaiting the release of the Consumer Price Index (CPI) data from the United States (US).
- Impact of CPI Data: The direction of crude oil prices is expected to be influenced by the CPI data. A strong CPI report could potentially diminish the likelihood of an immediate interest rate cut by the Federal Reserve (Fed). This scenario might strengthen the US Dollar (USD), presenting challenges for crude oil prices.
- Upcoming Reports: Market participants are eagerly waiting for the release of monthly market reports from key entities such as the Organization of the Petroleum Exporting Countries (OPEC), the International Energy Agency (IEA), and the Energy Information Administration (EIA) later in the week. These reports aim to provide insights into the global demand outlook for crude oil.
- US Crude Oil Production: According to the Energy Information Administration (EIA), US crude oil production has continued to lead global oil production for the sixth consecutive year. This information underscores the significance of the US in the global oil production landscape.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The current state of the crude oil market is marked by anticipation surrounding the US CPI data and upcoming reports from major entities in the oil market. The influence of the CPI data on the USD and subsequent effects on crude oil prices is a key consideration for traders. Additionally, ongoing leadership in global oil production by the US is a noteworthy factor in the broader market context.
DAX
- China's Influence on Market Sentiment: On Monday, economic indicators from China played a significant role in influencing market risk sentiment. Inflation numbers from the weekend sent mixed signals, with consumer prices in China increasing by 0.7% year-on-year in February after a decline of 0.8% in January.
- Impact of Chinese Indicators: The economic indicators from China had implications for global market sentiment, especially considering China's role as a major player in the world economy.
- US Consumer Inflation Expectations: On Monday, US consumer inflation expectations drew more interest than usual. Consumer inflation expectations remained unchanged at 3.0% for the one-year outlook. These expectations provide insights into how consumers perceive future inflation trends.
- German Consumer Price Index (CPI): This morning, the German Consumer Price Index (CPI) report for February was in line with market estimates. The CPI figure remained steady at 0.4% month-on-month and 2.5% year-on-year in February. Stable inflation figures are crucial indicators for the health of the German economy.
- ECB Commentary: Beyond the economic numbers, commentary from the European Central Bank (ECB) is also a factor to consider. ECB Executive Board members Luis de Guindos and Claudia Buch are scheduled to speak, and their remarks could provide insights into the ECB's perspective on economic conditions and policy considerations.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The DAX is navigating global economic indicators, with a focus on China's economic performance, US consumer inflation expectations, and the stability of the German Consumer Price Index. Additionally, insights from ECB executives will contribute to the broader understanding of the economic landscape influencing the DAX.