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Although safe-haven flows dominated the financial markets for the majority of the day on Monday, Wall Street’s main indexes managed to close the day modestly higher.
Gold suffered heavy losses and dropped toward $1,770 on Monday. With the 10-year US T-bond yield edging lower during the American trading hours, XAU/USD edged slightly higher and steadied near $1,780.
On Monday, Bitcoin struggled to build on last week’s gains and so went into a consolidation phase at around $24,000 on early Tuesday. After having failed to break above $2,000 Ethereum edged lower and was last seen losing 1% on the day at $1,880.
The dollar stays relatively quiet early Tuesday as markets await the next significant catalyst. The US Dollar Index gained more than 1% in the two-day recovery that started on Friday and was last seen moving sideways near 106.50.
Economic Data
The European economic docket will feature the ZEW Survey results for the euro area and Germany. In the second half of the day, the US Census Bureau will publish the Housing Starts and Building Permits data for July.
Later in the session, Statistics Canada will release the Consumer Price Index data for July.
Other Developments
Markets are cautious in the European morning with US stock index futures losing between 0.06% and 0.16%. Finally, the benchmark 10-year US Treasury bond yield stays flat below 2.8%.
China’s state planner National Development and Reform Commission (NDRC) announced multiple measures to avoid recession fears as it said, “We pledge to keep the economy within reasonable bounds.” The NDRC approved 65 fixed-asset investment projects worth a total of 1.028 trillion yuan from January to July and approved 8 fixed-asset investment projects worth a total of 236.8 billion yuan in July. Shanghai Composite Index was flat on the day at the time of press.
Falling crude oil prices weighed heavily on the Canadian dollar on Monday and USD/CAD climbed above 1.2900. Pressured by the worsening demand outlook and prospects of Iranian oil entering the market, the barrel of West Texas Intermediate fell more than 4% on Monday before recovering toward $88.50 on Tuesday.
USD/JPY fluctuated in a relatively wide range on Monday but closed the day virtually unchanged near 133.50. The pair is having a hard time making a decisive move in either direction early Tuesday.
GBP/USD dropped to its weakest level in more than a week at 1.2035 during the Asian trading hours on Tuesday. Although the pair managed to recover to 1.2050, it’s struggling to gather recovery momentum.
Also Read:
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