Here is what you need to know on Tuesday, April 5:
Risk sentiment remains in a better spot heading into the European session, although a sense of caution prevails amid talks of more Western sanctions against the Russian atrocities on Ukrainian civilians.
Investors also weigh the hawkish Fed expectations, in the face of the two-year and 10-year US Treasury yield curve inversion. Meanwhile, traders also digest the hawkish pivot from the Reserve Bank of Australia (RBA) after the central bank dropped its ‘patient’ pledge on the inflation developments.
The Asian markets traded with moderate gains, reaching the highest in five weeks, despite the holiday in China and Hong Kong. The tech stock rally on Wall Street buoyed the sentiment around Asia. The US stock futures, however, traded on the defensive, reflecting the investors’ wariness on the Ukraine crisis and surging oil prices.
Among other developments, Reuters reported on Monday that the US stopped the Russian government from paying holders of its sovereign debt more than $600 million from reserves held at American banks.
The US Ambassador to Poland Mark Brzezinski is set to sign a deal with Polish Defense Minister Mariusz Blaszczak to buy 250 upgraded M1A2 tanks and ammunition, support and recovery vehicles, GPS receivers and other equipment.
Meanwhile, Ukrainian President Volodymyr Zelenskyy will speak Tuesday during a United Nations (UN) Security Council meeting on the conflict in his country.
EUR/USD is consolidating Monday’s steep losses around 1.0970 in early Europe. Euro area recession fears weigh on the euro amid potential EU sanctions on the Russian gas imports.
GBP/USD is showing resilience above 1.3100 amid a broadly steady US dollar and mild optimism. The renewed uptick in the US Treasury yields could limit cable’s upside.
USD/JPY is licking its wounds near mid-122s, as the Japanese yen holds the upper hand after BOJ Governor Haruhiko Kuroda’s verbal intervention. Kuroda said that the central bank “we will offer to buy an unlimited amount of 10-year JGBs if a rise in long-term interest rates is rapid.”
Gold price is revering the previous gains but remains in a narrow range around $1,930. The rebound in the Treasury yields could keep the upside attempts limited in the bright metal ahead of the US ISM and S&P Global Services PMIs. Fedspeak will be also closely followed ahead of Wednesday’s Fed minutes.
USD/CAD is trading in daily lows around 1.2475, as the Canadian dollar benefits from surging oil prices, courtesy of the Ukraine crisis. The BOC Business Outlook Survey revealed that Canadian businesses expect average inflation to remain elevated over the next two years.
Bitcoin is struggling to recapture the $47,000 mark so far this Tuesday while Ethereum holds steady above just above $3,500. Ripple is on the backfoot near $0.8250.