Markets kicked off the week on a quiet note, with holidays in Asia and the UK, mixed US data, and trade jitters keeping volatility low. Even with Japan and the UK back from their long weekends, Tuesday remained calm as traders await key events, including Fed and BoE policy decisions and top-tier data from China, New Zealand, and Australia. Stalled US trade talks with Japan, China, the EU, the UK, and unimpressive US PMI figures are also weighing on sentiment, especially as the White House struggles to back Trump’s economic optimism.
On Monday, a stronger US ISM Services PMI was overshadowed by weak S&P Global PMI data and comments from Treasury Secretary Bassent, reinforcing expectations of a dovish Fed stance. Sentiment was further hit by stalled US-Japan trade talks and the EU and UK’s push for non-US trade deals, which pressured the US Dollar. Meanwhile, China’s mixed PMIs and doubts over its trade deal potential with the US added to market caution, despite some optimism around US-Canada and US-India trade progress.
With this, the US Dollar stays under pressure as major currencies and Antipodeans climb. Gold holds firm, oil trims its earlier losses, and cryptocurrencies trade quietly within range. Meanwhile, equities edge lower and bond markets remain subdued.
The US Dollar’s weakness helps EURUSD and GBPUSD recover recent losses, despite limited fresh catalysts. In Europe, the EU unveils plans to attract scientists affected by US policies, while the Financial Times reports the European efforts to ease access for UK professionals. Meanwhile, ECB and BoE officials express concern over inflation and growth risks linked to stalled US-EU and US-UK trade talks amid ongoing tariff tensions.
In Asia, the White House rejects Japan's request for full tariff exemptions, adding another obstacle to trade talks. Meanwhile, Tokyo officials dismiss the idea of using US Treasury holdings as leverage. Despite recent caution, BoJ policymakers maintain a hawkish stance, giving USDJPY bears hope, even as the pair struggles to break its two-day losing streak. Additionally, the Japanese Yen’s safe-haven appeal adds further downside pressure to the pair amid global economic uncertainty.
AUDUSD slips slightly after a two-day rally, while NZDUSD pauses after consecutive gains. Meanwhile, USDCAD stays flat following a positive daily close. China’s weak Caixin Services PMI, combined with limited optimism for a US-China trade deal and softening commodity prices, weighs on the Australian, New Zealand, and Canadian Dollars. This comes despite recent positive momentum for US trade deals with Canada, Australia, and New Zealand. Notably, Aussie Building Permits disappoint, while ANZ Commodity Prices rise, and the White House praises recent election results in Canada and Australia.
Gold continues its upward trend for a third straight day, reaching a two-week high, supported by a weaker US Dollar and global market uncertainty fueled by US trade policies and geopolitical tensions. The buying season in India, holidays in China, and a technical rebound from the 21-SMA further strengthen the precious metal’s rally.
Meanwhile, WTI Crude Oil sees mild gains after starting the week lower, impacted by OPEC+ supply news and concerns over US tariffs affecting demand. However, the softer US Dollar and short-covering before hitting an April multi-month low provide a corrective bounce early Tuesday.
Despite news of Strategy’s increased Bitcoin holdings and a second consecutive week of ETF inflows boosting sentiment on Monday, along with a weaker US Dollar, both Bitcoin (BTCUSD) and Ethereum (ETHUSD) show mild losses early Tuesday. That said, the market jitters and a lack of positive developments in the crypto industry weigh on prices of late.
The final prints of April PMIs for Germany, the EU, and the UK, alongside the US Goods Trade Balance, will headline Tuesday’s economic calendar. However, these releases are unlikely to sway the markets, as traders focus on the upcoming FOMC and BoE announcements later in the week. Mixed tariff news and a light geopolitical update could further limit market momentum, making for a quieter day.
With this, the US Dollar may see a corrective bounce amid market consolidation, potentially testing major currencies, Antipodeans, and Crude Oil. Meanwhile, Gold, CHF, and JPY could stay firm, supported by their safe-haven appeal amid global uncertainty.
May the trading luck be with you!
