Tuesday Market Commentary: Eyes on Canadian Inflation, Retail Earnings in Focus

Hello traders, welcome to Tuesday trading. Today brings a much busier calendar compared to the start of the week, with several market-moving events already underway.

The spotlight this morning is on inflation data from Canada, due to be published shortly. Expectations point to a reading of 0.3%, and traders are bracing for potential volatility on the Canadian dollar once the numbers hit. So far, the loonie is trading weaker, reflecting cautious positioning ahead of the release.

On the geopolitical front, we’re still watching peace talks around the war in Ukraine. But despite the headlines, there’s little of substance so far — no breakthrough and no change in the tense status quo.

The earnings calendar is also in play. Today, Home Depot reported results that came in worse than expected. Interestingly, pre-market action shows the stock set to rise slightly on the open, suggesting that investors may have priced in much of the disappointment already. This week will be dominated by retail sector results, with the main event on Thursday as Walmart publishes earnings before the market opens.

On the currency market, the session opens with a mix of movements. The Swiss franc and the euro are among the strongest performers, while Canadian dollar, Australian dollar, and even the US dollar are showing notable weakness.

Commodities paint a similar split picture. Oil remains under pressure, extending its losses into the week and trading lower again today. Meanwhile, gold and silver are stuck in indecisive sideways moves, with most metals negative overall since the week began.

As for indices, the action is muted, with sideways trading dominating. But there’s an important technical battle taking place: both Nasdaq and S&P 500 are fighting to defend key horizontal supports. Should these supports give way, the risk of a deeper correction would rise sharply. For now, traders are watching closely to see if the defense holds.