EURUSD
- EUR/USD Price: EUR/USD remains subdued in Tuesday’s European session, trading below 1.0500. Market sentiment is weighed down by US President-elect Trump’s tariff plans, which support the US Dollar and add to economic uncertainty in the Eurozone.
- Eurozone Economic Outlook: Political instability in Germany and France, coupled with ongoing economic concerns, has fuelled bearish sentiment for the Euro. Weak growth prospects and heightened uncertainty are exacerbating fears of a prolonged economic slowdown in the region.
- ECB Rate Cut Expectations: Markets have fully priced in a 25-basis-point (bps) rate cut by the ECB in December, with a growing 58% probability of a larger 50 bps cut. This dovish outlook continues to weigh on the Euro as investors anticipate easing measures to address economic stagnation.
- ECB Officials: ECB Vice President Luis de Guindos highlighted a shift in focus from inflation concerns to economic growth risks. Similarly, ECB policymaker Francois Villeroy de Galhau suggested that Trump’s policies are unlikely to have a significant impact on European inflation, reinforcing dovish ECB sentiment.
- Euro Vulnerability: Broad-based US Dollar strength, driven by tariff-related concerns and a relatively resilient US economy, further limits the Euro’s upside. The divergence in monetary policy expectations between the ECB and the Federal Reserve continues to favour the USD.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD remains vulnerable as Eurozone economic challenges mount and dovish ECB bets grow. Near-term movements will depend on developments regarding Trump’s trade policies and upcoming Eurozone economic data, particularly leading into December’s ECB meeting.
GBPUSD
- GBP/USD Price: GBP/USD remains under pressure, trading near 1.2570 during Tuesday's European session, after briefly slumping to the 1.2500 region. The pair reflects market caution amid mixed signals from the Bank of England (BoE) and a broadly strong US Dollar.
- BoE Officials: BoE Deputy Governor Clare Lombardelli voiced support for a gradual easing of monetary policy, suggesting a cautious approach to rate cuts. Conversely, BoE external policy member Swati Dhingra advocated for a more aggressive path, citing inflation dynamics in line with other advanced economies.
- BoE Outlook: Current market expectations suggest that the BoE will keep interest rates steady at 4.75% in its December meeting. The lack of clarity on the pace of monetary easing reflects broader uncertainty in the UK’s inflation and growth outlook.
- US Trade Policy: President-elect Donald Trump’s announcement of steep tariffs on imports from Mexico, Canada, and China has bolstered the US Dollar, adding to GBP/USD headwinds. These trade measures are expected to fuel global economic uncertainty, further supporting USD strength.
- Pound Struggles: The British Pound faces challenges due to a lack of domestic economic data this week. Market participants remain focused on developments from BoE policymakers and broader risk sentiment influenced by US trade policy and USD trends.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD remains vulnerable amid mixed BoE signals and strong USD momentum driven by risk-off flows. Traders will watch for further BoE commentary and US developments to assess near-term direction, with 1.2500 acting as critical support.
GOLD
- Gold Price: Gold continues to face selling pressure, trading near a one-week low during Tuesday's European session. The bearish momentum reflects reduced demand for the safe-haven asset as geopolitical and trade developments dominate market sentiment.
- Impact of US Trade Policy: President-elect Donald Trump's announcement of a 25% tariff on imports from Mexico and Canada, and an additional 10% on Chinese goods, has heightened global trade concerns. However, the Chinese ambassador’s warning of broader impacts has yet to generate significant safe haven flows into gold.
- Easing Geopolitical Tensions: Gold demand is subdued amid waning geopolitical tensions between Israel and Lebanon. Reports suggest the Israeli cabinet will approve a ceasefire deal, which has reduced risk sentiment and weighed on gold prices.
- USD and Treasury Yields Pressure: Renewed demand for the US Dollar and a rebound in US Treasury bond yields have curbed enthusiasm for gold buying. Investors remain cautious, awaiting the Federal Reserve’s meeting minutes for guidance on the December interest rate cut outlook.
- Treasury Appointment: On Monday, gold dropped even as the USD weakened briefly following the news of Scott Bessent's appointment as Treasury Secretary. This highlights the lack of a sustained safe haven bid despite political and economic uncertainty.
Closing statement: XAU/USD remains under pressure amid easing geopolitical tensions and strong USD dynamics. Gold traders will closely monitor upcoming Fed minutes and trade-related developments for direction, with $2,700 acting as a key psychological resistance level.
CRUDE OIL
- WTI Price: West Texas Intermediate crude oil is trading near $69.40 on Tuesday, reflecting cautious market sentiment amid mixed geopolitical and demand signals. The price has shown resilience despite easing regional tensions.
- Israel-Lebanon Ceasefire: Reports indicate that Israel and Lebanon have agreed to the terms of a ceasefire, potentially de-escalating the Israel-Hezbollah conflict. This development has temporarily capped geopolitical risk premiums that had been supporting crude prices.
- Russia-Ukraine Conflict: The Russia-Ukraine conflict continues to generate supply- side concerns, with fears of disruptions possibly fueling near-term support for oil prices. Escalation risks remain a critical factor for WTI traders.
- China's Oil Demand: China's crude imports are expected to reach 11.4 million barrels per day in November, driven by price cuts and strategic stockpiling. S&P Global forecasts a 1.1% demand growth in 2024, highlighting China's importance in stabilizing global oil demand.
- Key US Reports: With the Thanksgiving holiday, crude traders are eyeing the American Petroleum Institute (API) stockpile data release on Tuesday, followed by Energy Information Administration (EIA) numbers and the Baker Hughes Rig Count on Wednesday. These reports are likely to provide clarity on US supply dynamics.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: WTI crude remains in a consolidation phase, with market participants balancing easing Middle Eastern tensions against persistent Russia-Ukraine risks and strong Chinese demand forecasts. Upcoming US inventory data could set the tone for oil prices heading into the holiday period.
DAX
- DAX Gains: The DAX rose by 0.43% on Monday, adding to Friday’s 0.92% advance. Market optimism was fueled by easing Middle East tensions, the nomination of Scott Bessent as US Treasury Secretary, and growing expectations of ECB rate cuts, which together boosted risk appetite.
- Market Movers: Automotive stocks led the gains, with Porsche Preferred Stock surging 2.77%, BMW climbing 2.21%, and positive moves from Mercedes Benz Group and Volkswagen. Retail stocks also showed strength as Adidas jumped 3.17%, and Zalando rose by 1.22%, reflecting improved investor confidence in consumer-focused sectors.
- Declining Business Sentiment: The Ifo Business Sentiment Index dropped to 85.7 in November from 86.5 in October, reflecting growing concerns over Germany’s economic outlook. This decline could signal further pressure on the labor market and consumer spending in the near term.
- US Economic Data: In the US, the Chicago Fed National Activity Index fell unexpectedly in November, indicating weaker economic activity. However, the Dallas Fed Manufacturing Index showed a modest improvement, reflecting mixed signals about the US economy's trajectory.
- US Consumer Confidence: On Tuesday, attention turns to the US CB Consumer Confidence Index. A projected increase from 108.7 in October to 111.6 in November could influence Fed rate expectations and shape global market sentiment, indirectly affecting DAX performance.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The DAX continues to gain momentum on optimism surrounding monetary policy and easing geopolitical tensions. However, softening German business sentiment and mixed US economic data signal potential headwinds. Upcoming US consumer confidence data will likely be pivotal in shaping investor sentiment in the days ahead.