Market Roundup
• Canada Common CPI (YoY) (Apr) 2.5%, 2.3% forecast, 2.3% previous
• Canada Core CPI (MoM) (Apr) 0.5%,0.2%, 0.1% previous
• Canada Core CPI (YoY) (Apr) 2.5%,2.2% previous
• Canada CPI (YoY) (Apr) 1.7%, 1.6% forecast, 2.3% previous
• Canada CPI (MoM) (Apr) -0.1%, -0.1% forecast, 0.3% previous
• Canada Median CPI (YoY) (Apr) 3.2%,2.9% forecast, 2.9% previous
• Canada Trimmed CPI (YoY) (Apr) 3.1%, 2.8% forecast, 2.8% previous
• US Redbook (YoY) 5.4%,5.8% previous
• EU Consumer Confidence (May) -15.2,-16.0 forecast, -16.7 previous
• New Zealand GlobalDairyTrade Price Index 4.6% previous
Looking Ahead Events And Other Releases(GMT)
•03:00 New Zealand Credit Card Spending (YoY) (Apr) 0.8% previous
Currency Summaries
EUR/USD: The euro edged higher on Tuesday as the U.S. dollar softened following cautious remarks from Federal Reserve officials. Fed officials on Tuesday also doubled down on their concerns about the impact of the Trump administration's trade policies on the economy. St. Louis Federal Reserve Bank president Alberto Musalem said despite the recent U.S. and China trade tension easing, the labor market looks likely to weaken and prices to head higher. Cleveland Fed President Beth Hammack told Axios that current trade developments could lead to stagflation, opens new tab, though other policies from the administration could offset that. On Monday other Fed officials talked about the ramifications of the latest downgrade of the U.S. government's credit rating and unsettled market conditions as the Fed continued to navigate a very uncertain economic environment. Immediate resistance can be seen at 1.1378(23.6%fib), an upside break can trigger rise towards 1.1451(Higher BB).On the downside, immediate support is seen at 1.1190(38.2%fib), a break below could take the pair towards 1.1103(Lower BB).
GBP/USD: The British pound held steady against the U.S. dollar on Tuesday as investors assessed the impact of the newly announced UK-EU reset deal. Sentiment was also influenced by Bank of England Chief Economist Huw Pill’s remarks, where he cautioned that recent interest rate cuts may have been too swift, citing persistent wage-driven inflation. Pill noted his vote to hold rates this month was likely a “skip,” not a signal of a full stop in tightening. The BoE cut rates by 25 bps to 4.25% on May 8, and markets are pricing in another cut in June. After last week’s stronger-than-expected GDP data supported the pound, attention now turns to the UK CPI report due Wednesday. Immediate resistance can be seen at 1.3422(23.6%fib), an upside break can trigger rise towards 1.3476(Higher BB).On the downside, immediate support is seen at 1.3346(May 20th low), a break below could take the pair towards 1.3238(38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday as investors slashed bets on a Bank of Canada interest rate cut next month after domestic data showed underlying inflation heating up . Canada's annual inflation rate fell to 1.7% in April due to a drop in energy prices but two core measures closely watched by the BoC moved above 3%. The Canadian overnight index swaps market was pricing in a 33% chance of an interest rate cut at the next BoC policy decision on June 4, down from 65% before the data. The central bank left its benchmark rate on hold at 2.75% last month, the first pause since the easing campaign began last June. The loonie was trading 0.2% higher at 1.3925 per U.S. dollar , after moving in a range of 1.3918 to 1.3968.Immediate resistance can be seen at 1.3964(May 20th high), an upside break can trigger rise towards 1.4014(38.2%fib).On the downside, immediate support is seen at 1.3850(23.6%fib), a break below could take the pair towards 1.3741 (Lower BB)
USD/JPY: The U.S. dollar weakened to a two-week low against the Japanese yen on Tuesday as market focus shifted to the health of the U.S. economy and upcoming U.S.-Japan talks, which may include discussions on foreign exchange stability. Japanese Finance Minister Katsunobu Kato said he expects his meeting with U.S. Treasury Secretary Scott Bessent to reflect a shared stance against excessive currency volatility. The two are set to meet on the sidelines of this week's G7 finance summit in Canada. While trade talks between Tokyo and Washington will address tariffs, currency issues have been reserved for the finance chiefs, signaling the importance both sides place on exchange rate stability.Immediate resistance can be seen at 145.63 (Daily high)an upside break can trigger rise towards 146.48(38.2%fib) .On the downside, immediate support is seen at 144.22(23.6%fib)a break below could take the pair towards 142.42(May 7th low)
Equities Recap
European stocks ended near nine-week highs on Tuesday, supported by gains in utilities and telecom sectors, along with a boost from upbeat corporate earnings.
UK's benchmark FTSE 100 closed up by 0.94 percent, Germany's Dax ended up by 0.42 percent, France’s CAC finished the day up by 0.75 percent.
U.S. stocks declined on Tuesday, snapping a six-day winning streak for the S&P 500, as rising Treasury yields and concerns over the country's debt outlook weighed on investor sentiment.
Dow Jones closed down by 0.27 %percent, S&P 500 closed up by 0.39% percent, Nasdaq settled up by 0.38% percent.
Commodities Recap
Gold prices climbed over 1% on Tuesday, supported by a weaker U.S. dollar and falling equities, as investors remained cautious amid uncertainty surrounding U.S. tariff policy and potential Russia-Ukraine ceasefire talks.
Spot gold was up 1.7% at $3,284.74 an ounce by 1345 ET (1745 GMT). U.S. gold futures settled 1.6% higher at $3,284.6.
Oil prices were largely steady on Tuesday, weighed by uncertainty around U.S.-Iran nuclear negotiations and Russia-Ukraine peace efforts. Additionally, cautious economic data from China, the world’s top crude importer, kept gains in check.
Brent futures slid 16 cents, or 0.2%, to settle at $65.38 a barrel, while U.S. West Texas Intermediate (WTI) crude slid 13 cents, or 0.2%, to settle at $62.56.
