Hello traders, let’s take a look at the market situation on Tuesday morning before the European session begins. Yesterday, the most important data point was US retail sales, which disappointed expectations, coming in at 0.2% instead of the forecasted 0.6%. The weaker data initially triggered a negative reaction on the US dollar, which is a natural response to signs of slowing consumer activity. However, equities didn’t seem to care about this miss, as major indices continued their upward push throughout the session.
Looking at today's calendar, the main event to watch is inflation data from Canada, where the CPI is expected at 0.6%. This will be a key report for the Bank of Canada’s monetary policy outlook, and traders will closely watch how it affects the Canadian dollar’s performance. Apart from this, Tuesday is relatively quiet, but traders are already positioning ahead of a very busy Wednesday, Thursday, and Friday, with key events including interest rate decisions from major central banks.
Monday’s trading session was very positive for indices, with major benchmarks climbing significantly higher despite weaker retail sales data from the US. This suggests that markets remain confident about economic resilience, or that traders are focusing on expectations of monetary easing later in the year. However, Tuesday morning begins with a slight bearish correction, which is a typical profit-taking move after a strong session. The overall trend remains bullish, but traders will watch whether indices can hold their gains throughout the day.
The US dollar is bouncing back this morning, reversing some of its losses from Monday. Along with the dollar, the Swiss franc and euro are showing notable strength in early trading. On the other side of the spectrum, Japanese yen, Australian dollar, and New Zealand dollar are under pressure. The weaker yen suggests a return to risk-on sentiment, while Australian and New Zealand dollars are struggling, likely due to positioning ahead of Wednesday’s key events, including the Bank of Japan and Federal Reserve decisions.
Commodity markets are showing strong momentum this morning. Gold and silver are climbing higher, along with other precious metals, as investors continue to position defensively ahead of central bank meetings. This follows a strong Monday session for metals, reinforcing the idea that bullish sentiment remains intact in this sector.
Meanwhile, oil continues its rebound, with Brent crude and WTI both extending gains. The move suggests that oil bulls are gaining confidence after several weeks of weakness, but it’s still too early to say whether this is the start of a sustained rally or just a short-term correction.
Tuesday begins with a slight pullback in indices, but the overall trend remains positive after a strong Monday rally. The US dollar is regaining strength, while Japanese yen and commodity currencies remain weak. Gold and silver are climbing higher, while oil is pushing further into its bullish correction. Traders will keep an eye on Canadian inflation data, but the main focus remains on the major central bank decisions coming later this week.