Cautious optimism prevailed this Tuesday, as indicated by moderate gains on the Asian equities and US futures while Treasury yields fell back in the red after the overnight risk-on rally. The US Commerce Department granted a 90-day extension to the Chinese technology giant, Huawei, on Monday, triggering a fresh risk-on wave across the financial markets.

Across the forex space, Dollar retreated broadly from three-week tops, USD/JPY remained on the back foot below 106.50, with the upside capped below the 106.70 level. Among the European currencies, EUR/USD kept its range below the 1.11 handle, despite increased German stimulus hopes, while, GBP/USD dropped below the 1.21 handle, awaiting fresh Brexit/ UK political update.

We have another thin-showing on the macroeconomic front in the session ahead, with the Eurozone Construction Output and UK CBI Industrial Orders Survey due on the cards at 09:00 GMT and 10:00 GMT respectively.

The NA docket also remains data-light, with the US American Petroleum Institute (API) weekly Crude Oil Stock data slated for release at 20:30 GMT. In the American afternoon, the FOMC member Quarles is scheduled to speak at 2200 GMT.

The macro news will continue to play second fiddle to the US-China trade updates, US President Trump’s comments and Brexit-related noise, all of which will have a significant impact on the market sentiment and volatility. However, the main event risks this week remain the July Fed meeting’s minutes and the 3-day Fed’s Jackson Hole Symposium.

Oil gained traction on Tuesday and the barrel rose to $56.50 earlier in the day. The safe-haven gold kept its bearish momentum intact below the $1,500 mark amid the latest trade-optimism.