Just when it looked like the markets were calming down again, volatility began as US traders returned to their offices after the Memorial Day holiday.
West Texas Intermediate crude rose more than 2% to reach $80 per barrel again, while US bond yields also made significant gains after the Treasury auction.
How did the rest of the asset classes perform?
Titles:
- Australian retail sales for April: 0.1% mo/month (0.3% expected, -0.4% previous)
- BOJ core CPI for April: 1.8% y/y (2.2% expected, 2.2% previous)
- BoE April UK Sales: +8 (-24 expected, -44 previously)
- Canadian Industrial Produce Price Index for April: 1.5% m/m (0.8% expected, previous reading upgraded to 0.9%)
- Canadian Raw Materials Price Index for April: 5.5% m/m (3.1% expected, previous reading decreased from 4.7% to 4.3%)
- US S&P/CS Home Price Index for March: 7.4% YoY (7.3% expected, 7.3% previous)
- US CB Consumer Confidence Index for May: 102.0 (96.0 expected, previous reading upgraded from 97.0 to 97.5)
Broad market price movement:
Dollar Index, Gold, S&P 500, Oil, 10-Year US Yields, Bitcoin Overlay Chart by TradingView
Tuesday was shaping up to be another snoozer for the majority of asset classes, with the exception of Bitcoin which fell below the $68,000 support area and Crude Oil which continued to enjoy upward momentum as geopolitical tensions resurfaced.
Gold and US bond yields also fell early in the day, before the latter advanced during the US Treasury bond auction. As it turned out, demand was still relatively sluggish for two-year and five-year bonds, pushing the two-year yield by 2.8 basis points near 5% and the five-year yield by 6.3 basis points.
US stocks were mixed, with the Nasdaq closing at another record high while the Dow Jones Industrial Average closed down 0.55% and the S&P 500 moved mostly sideways.
Forex market behavior: US dollar against major currencies
Overlay of the US dollar against major currencies Chart by TradingView
The dollar had a shaky start as US traders were still enjoying the Memorial Day holiday. The US currency rose slowly ahead of the London session, before falling again ahead of the release of the central bank's consumer confidence report.
Housing market indicators were mixed for Uncle Sam, with the S&P/CS HPI rising from 7.3% to 7.4% y/y in March rather than holding steady, and the FHFA HPI falling below estimates by a meager 0.1% m/m. Monthly rise versus expected gain of 0.5%.
The CB Consumer Confidence Index for May beat estimates with a reading of 102.0 versus an expected drop from 97.5 to 96.0, thanks to improvement in both the outlook and current situation readings. The dollar actually rebounded before the actual release and managed to maintain its gains for the rest of the New York session.
Potential catalysts coming on the economic calendar:
- Preliminary German consumer price index scheduled for release
- German GfK Consumer Climate Index at 6:00 AM GMT
- Swiss UBS Economic Outlook Index at 8:00 AM GMT
- US Richmond Manufacturing Index at 2:00 PM GMT
- FOMC Member Williams' speech at 5:45 PM GMT
- Fed Beige Book at 6:00pm GMT
- RBA Assistant Governor Hunter's speech at 10:50pm GMT
- FOMC Member Bostic's speech at 11:00 PM GMT
The euro may witness major movements in the trading session in London, as its largest economy Germany is scheduled to print its preliminary consumer price index reading for May. Although the ECB's June cut has largely been taken into account, traders are still keen to see whether or not the latest round of inflation numbers could trigger successive easing moves from the central bank.
Later, Federal Reserve Beige Book Edition It may also be worth keeping an eye on the tabs as this will contain more insights into how the regions are performing, likely impacting the Fed's policy outlook.
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