US yields, stocks drop, following return from long weekend

Chris Beauchamp IG

Following a long weekend, US investors played it cool amid ongoing technology and software sector concerns which dragged indices down, says Axel Rudolph, Chief Technical Analyst at investing and trading platform IG.

US yields, stocks drop

The US 10-year yield slipped to 4.02% - to its lowest since early December - and stocks declined further as last week's softer inflation data kept June Fed-cut expectations alive despite stronger payrolls, with markets pricing around 62bp of easing this year ahead of Fed minutes, GDP and core PCE data. European stock indices regained some of Monday's losses despite German economic sentiment coming in weaker than expected and the UK unemployment rate nearly rising to a 5-year high.

Commodities under pressure

Gold, silver and copper prices slid on Tuesday as the US dollar rose to a one-week high and Iran/US nuclear talks progressed. Oil prices slid but the fall was more pronounced for US natural gas which saw its steepest decline in four months, dropping by around 6%.

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Chris Beauchamp

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.