After a quiet Monday marked by market closures in the US and Canada, Tuesday brings traders back to full action with a busier calendar and renewed volatility. With fresh data on the horizon and early market moves already pointing to strong trends, the day is shaping up to be eventful.
The calendar is highlighted by Eurozone CPI Flash Estimate, expected at 2.1%, a key number that could determine the euro’s next big move. Later in the session, the focus will shift across the Atlantic to the ISM Manufacturing PMI from the US, where the figure is anticipated at 49, keeping it below the critical 50 threshold that separates expansion from contraction. Both releases have the potential to inject volatility into FX and indices, setting the tone for the midweek sessions.
On the markets, indices are under pressure, extending the bearish correction that started last week. The German DAX is leading the downside, with losses accelerating ahead of the European cash market open. Futures are clearly pointing south, but traders will be watching closely whether the sentiment persists once regular trading begins.
Currencies are showing clear directions. The US dollar and Canadian dollar are stronger, reflecting both safe-haven flows and positioning ahead of key data. On the other side, the Japanese yen is weakening, sending pairs with the yen significantly higher and fueling the strongest moves in FX this morning. The euro, in contrast, remains steady, waiting for inflation data before choosing direction.
Commodities, however, tell a different story. Gold is hitting new long-term highs, keeping its bullish sentiment intact as investors look for protection in an uncertain environment. Oil is also pushing higher, climbing rapidly after yesterday’s false bearish breakout from its triangle formation. The recovery in oil adds fuel to bullish momentum in the energy sector and strengthens the technical case for further gains.
As we move into the European session, all eyes are on whether indices will continue their decline or attempt a rebound, and whether today’s macro numbers will spark a fresh wave of volatility.