Turnaround Tuesday plays its role while reversing the latest market moves and helping the US Dollar to regain its charm, exerting downside pressure on the riskier assets even as the market sentiment stays mixed. The reason could be linked to the trader’s reassessment of market dynamics as the full markets returned after an extended weekend in the US and Japan.
That said, the central bankers from the US, Eurozone and the UK defend their respective hawkish policies but the Fed officials gain comparatively more acceptance amid economic fears surrounding Europe and Britain. Also, receding geopolitical concerns about Israel and mixed feelings about China join economic fears surrounding Asia to confuse traders.
Amid these plays, the US Dollar manages to prod the four-day-old losing streak while the prices of Gold and Crude oil remain pressured. That said, the USDJPY appears leading the G10 losers versus the Greenback while AUDUSD, NZDUSD, USDCAD and GBPUSD follow suit.
It’s worth noting that Wall Street closed with minor gains but the Asia-Pacific shares lack momentum. Further, yields lick their wounds after a gap-down opening whereas the stock futures are indecisive of late.
Even so, BTCUSD and ETHUSD print mild gains after declining in the last few days.
Following are the latest moves of the key assets:
As a bloody war continues between Israel and Hamas, global leaders take sides while Reuters came out with the news suggesting a Hamas official said they are open to discussions over a truce with Israel. Also favoring the sentiment were comments from China's Commerce Minister Wang Wentao who cited rational and pragmatic discussions with the US Senators in Beijing on Tuesday.
Meanwhile, bad news from China’s Country Garden prods the optimists in the Asia-Pacific zone, especially amid the hawkish Fed talks. That said, China’s Country Garden defaults on debt payments and triggers credit woes in the Asian major. The same allowed World Bank Chief Economist Indermit Gill to say that rising debt levels among seemingly healthy countries in Asia could drag growth in the region below currently forecast levels.
Dallas Fed Pres. Logan highlighted the need for Restrictive financial conditions whereas Fed Vice Chair Philip Jefferson said, “May be too soon to say confidently we have tightened enough.” Further, Fed Vice Chairman of Supervision Michael Barr said Monday that banks need to be prepared for the worst while also citing the economic soundness of the US.
On a different page, ECB officials tried to tame the recession woes but kind of hesitated from further rate hikes, despite defending the restrictive monetary policy. However, the Bank of England Monetary Policy Committee member Catherine Mann said that UK wage and price inflation are sticky downwards and hence prod the policy hawks, as well as the GBPUSD buyers. It should be observed that grim concerns about the British economy are in the news of late and exert downside pressure on the Cable.
Phishing attacks on Binance crypto accounts and the resulting loss of around $4,50,000 drowned the BTCUSD and ETHUSDD before the latest consolidation.
A slew of central bank officials from the ECB, Fed and the BoE are up for speaking on Tuesday, the first active day of the week. While all of them are likely to defend their hawkish bias, the Fed talks may help the US Dollar to extend the latest rebound while downbeat comments from the ECB and the BoE officials may help the Greenback rise further and drown the Euro and the Pound. Elsewhere, the geopolitical concerns about Israel and China will also entertain traders but a light calendar could restrict the market moves.
May the trading luck be with you!
