The market mood was mostly cautious in Tuesday’s trading, fuelled by the renewed US-China trade deal doubts, spiralling unrest in Hong Kong and US President Trump’s dig at Fed again.
Amid tepid risk sentiment, the US dollar failed to build on its overnight recovery and fell back in the red against most majors. Meanwhile, the Yen regained ground vs. the US dollar amid mixed Asian equities and subdued Treasury yields, as USD/JPY traded around 108.60 region. Heading into the European open, both the EUR/USD pair and GBP/USD pair are back on the bids, looking to extend their recent recovery.
Markets brace for a relatively light EUR macro calendar, with the second-tier data lined up for release, including the Eurozone Current Account and Construction Output. From the UK docket, the CBI Industrial Trends Survey – Orders (MoM) for November will drop in at 11:00 GMT. Also, in focus will remain the ITV’s political debate, which will shed more light on the UK political scenario going forward.
In the NA session, the US Housing Starts and Building Permits data will be released at 13:30 GMT. Meanwhile, the American Petroleum Institute (API) weekly US Crude Stocks data will be closely watched at 21:30 GMT.
Apart from the data, the speeches by the Fed official Williams and BOC board member Wilkins will grab some attention. However, the US-China trade-related headlines will continue to remain the main market driver.
Oil looks for fresh clues to extend the latest pullback from eight week high. Risk-tone declines amid trade pessimism and Hong Kong protests, with WTI clinging to $57.00.
Gold prices consolidated the recovery around $1,470, as markets await fresh cues on the trade front. Overnight, risk appetite was dented by the news that Trump and Fed Chairman Powell had met to discuss the strength of the dollar. At the same time, there were reports of a CNBC news that Chinese officials were concerned over prior comments with respect to tariffs from Trump.