US budget talks go on, target sounds a warning on spending

Chris Beauchamp IG

Investors are watching the budget talks in Washington closely, while there are more signs that consumers are reining in their spending says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Stocks struggle thanks to debt and spending worries

It’s too early to say that the rally from April’s lows has run its course, but the going continues to get tougher for stocks. The US budget continues to dominate newsflow, but it takes place in a market atmosphere that’s now much less forgiving of Washington’s propensity to spend, spend, spend without regard for the consequences. To add to that, the economy that supports the whole tottering edifice continues to give cause for concern; Target has reduced its annual forecast as spending comes under pressure. Stocks have shown a remarkable ability to recover from bad news, but investors cannot take it for granted right now.

Oil prices trim gains

Brent and WTI have eased back from their overnight highs but worries about an Israeli strike on Iran could easily send them flying once again. Without a comprehensive deal to restrain Tehran’s nuclear programme, Tel Aviv may feel it has run out of road and needs to act now. Such a move would prompt a much bigger move higher in oil than that seen yesterday.

Author

Chris Beauchamp

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.