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The US dollar recovered most of the losses from Monday by Tuesday morning, while sentiment in the emerging markets was quite mixed. The USD/MXN pair reached a new three week high on Monday, while the USD/INR pair continued moving lower.
European markets moved slightly lower by the start of the European trading session on Tuesday morning after indices like the Germany 30 or Europe 50 were up on Monday, while the Spain 35 reached even a new one year high.
While the total crypto market cap continued to be on the rise, moving above $2.3 trillion while the Bitcoin dominance continued to be on the decline falling below 45%, while the Ethereum rally continued as the second biggest cryptocurrency by market cap for a long time rose by roughly a third of its value within the past week, while Bitcoin gained just above three per cent over the same period of time. In terms of weekly performance this was however even exceeded by the sixty per cent weekly gain of Dogecoin, which not is seen as the fifth biggest cryptocurrency by market cap.
On Tuesday Canadian and US trade balance data for March can be expected, while from the US also data on factory orders will be released. Later in the Asian-Pacific trading session the Labour Cost Index from New Zealand and building approval data from Australia for the first quarter is being published.
The retracement of the dollar at the beginning of the week allowed the EUR/USD pair to recover moderately after the sizable drop on Friday. However, by Tuesday night that trend seemed to reverse with the EUR/USD pair continuously pushing lower. The common European currency performed mixed against other majors. While it managed to improve against the JPY, the EUR/GBP fell to a new one-week low.
Economic fundamentals painted a mixed picture on Monday. German retail sales were surprisingly resilient in march, rising by 7.7% on a monthly basis, whereas the manufacturing PMI moved slightly lower compared to the previous month in April to 66.2 vs. 66.6. The US ISM Manufacturing Index showed an even bigger decline from 64.7 in the previous month, falling to 60.7.
Gold prices moved higher at the start of the week as the dollar weakened and yields moved lower. Platinum and silver prices also edged higher with silver prices reaching a new two-months high as the prices moved by almost four per cent higher on Monday alone.
Palladium prices ended the day on Monday at a new all-high after reaching a new intraday record last week above $3,000 for a troy ounce.
Analysts are still unsure whether the non-stop printing of money by central banks to “stimulate” economies will indeed cause inflation, which could be positive for gold as a store of value. Others argue that what is happening now has been down in Japan for decades, leading to flat inflation if not even outright deflation.
Oil prices strongly rebounded at the start of the new week, recovering most of the steep losses from Friday, when oil prices fell by more than two per cent (WTI crude).
Some analysts see oil prices responding to political signals that global travel might start becoming easier in the coming months, such as the EU unveiling a proposal to allow vaccinated travellers to enter again its territory. This is still however for now just an outlook as data indicating that India’s oil imports from OPEC countries dropped to the lowest level in two decades shows that in the past weeks and months the pandemic clearly impacted demand in the market. On the bright side, daily TSA checkpoint travel numbers reached with 1.63 million the highest level in more than a year.
As almost every week on Tuesday the American Petroleum Institute (API) publishes its weekly statistical bulleting on Tuesday, followed by energy market data from the Energy Information Administration (EIA) On Wednesday, which among other data includes weekly changes on crude oil and gasoline inventories.
Major stock market indices with the US 30 index being an exception moved into the red at the start of the week. Performance was quite mixed among different sectors. The chip sector (US Semiconductors ETF -1.05%) was again a key underperformer, while stocks from the energy sector (US Energy +2.89%) strongly recovered after the slump on Friday just as market prices for energy commodities edged higher.
EBay (+4.11%) was one of the best-performing stocks in the market and the best one in the NASDAQ 100 index on Monday after the steep fall last week following the release of its quarterly results, which included a rather disappointing guidance. Ebay announced that it would consider accepting cryptocurrencies on its platform as well as allowing non-fungible tokens (NFT)s on its market platform.
Tuesday is set to be another day packed with quarterly earnings releases from companies including Pfizer, CVS Health, Lyft, Activision Blizzard, T-Mobile (US) and others.
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