Analysts at TD Securities explained that market sentiment was upbeat on Tuesday with North American equities (SPX: +0.4%, TSX: +0.2%) posting moderate gains. Rates bear-steepened on both sides of the border while Canada underperformed modestly in the long-end.
The USD saw a mixed performance against G10 FX with CAD (+0.6%) rallying on higher oil prices (WTI: +2.8%) ahead of Hurricane Florence and reports that Canada is ready to offer concessions on dairy in NAFTA talks. JPY (-0.4%) edged lower on the more favorable risk environment while NOK firmed on upbeat GDP data. We turn to Australian consumer confidence amid a quiet session for data.
What We're Watching in Markets
"The price action in the majors sits in well-contained ranges, as markets await possible data and monpol catalysts later in the week. The story in the G10 is one of European outperformance led by the scandis. The marginal news flow in Europe has turned a bit more positive, underscoring the recent Brexit developments and the market-friendly outcome in the Swedish elections. EUR/USD has given back early session gains after marking an intraday high of 1.1644. Still, we note the contraction in the BTP risk premium, reflecting the efforts of Italian officials to calm fears regarding next year's budget. EURUSD HFFV sits at 1.18, implying a roughly 2-sigma discount and buying into dips near the lows of 1.1550. Global yields continue to grind higher amid improving risk sentiment. From a trading perspective, we continue to favor our cross-market 10y USD vs. EUR spread compression trade."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.