FOREX
The US dollar edged down in early Tuesday trading as investors focused on the upcoming release of PCE inflation data later in the week. Personal Consumption Expenditure, the Federal Reserve’s preferred inflation measure, is expected to have slowed to 0.2% in April compared to the previous month. This scenario will solidify expectations of a Fed rate cut in September if confirmed. Other US inflation readings for April also indicated a slowdown in price increases, a trend that could lead to further dollar softness as the likelihood of a rate hike diminishes and traders increase bets on a September cut.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks climbed slightly higher in Europe on Tuesday, extending gains registered in Asia overnight, as traders brace for key macro data this week. EU benchmarks have held most of their advance registered on Monday, with the prospect of crucial inflation and other significant economic figures from the Eurozone, the US, and China expected to boost bullish hopes for the second part of the week.
Market sentiment towards riskier assets remains positive overall, as investors stay confident despite lingering uncertainty on both the economic and geopolitical fronts. The STOXX-50 index now trades above the 5,050pts level, following the bullish break-out of its bearish flag pattern, ending the consolidation that started in the second part of May.
Top movers can be found among tech and financial shares, with ASML Holding and Intesa Sanpaolo registering the best performances so far. With 5,050pts/5,053pts as the new short-term support for the STOXX-50 index, the next targets before the crucial 5,100pts level can be found towards 5,075.0pts.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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