FOREX
The US dollar touched a one-month low during early Tuesday trading, as the volatility in the bond market saw a drop in treasury yields mirrored by the greenback. The dollar remains at the centre of currency traders’ attention, and a new rally could easily follow the recent softness as the markets await the release of crucial US economic data, with next week’s Federal Reserve meeting also looming on the horizon. This week will see the release of US PMI data, as well as GDP figures and PCE inflation. All of these will be closely monitored by traders eager to access the resilience of the US economy in the runup to next week’s Fed meeting. Strong readings could lead to dollar strength, while disappointing figures would likely accentuate the recent greenback softness.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: Activtrader
EUROPEAN SHARES
Following the rebound registered during yesterday’s trading session, European benchmarks held their gains on Tuesday as bearish sentiment took a break.
The sell-off in treasury bonds cooled off while the risk-on sentiment continued over European shares, with strong performances from consumer cyclicals, real estate and utility stocks offsetting losses in healthcare, industrial and financial sectors so far.
Investors continue to monitor the geopolitical situation in the Middle East after the latest round of talks over the hostages detained by Hamas and recent calls to reconsider any ground invasion of the Gaza strip by the Israeli army.
Meanwhile, investors are also focused on economic data and corporate results, ahead of a hectic day today with a batch of PMI data from Europe and the US alongside the IEA’s world energy outlook annual report.
Traders are also likely to face increased market liquidity due to the volume of major earnings reports today with results from Hermes, Kering, Michelin and Orange in Europe and Alphabet, Microsoft and General Motors in the US.
Technically speaking, the STOXX-50 index continues its bullish correction below its mid-term bearish trendline, with the 4,075.0pts as its first major target.
Pierre Veyret – Technical analyst, ActivTrades
Source: Activtrader
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