Midday brief – US CB Consumer Confidence in focus

The Euro kept modest gains against the dollar as traders await President Christine Lagarde’s speech and data from the US. Japanese Governor Haruhiko Kuroda stood on the point of maintaining the central bank’s easy monetary policy stance for now.

BoE’s Andrew Bailey strengthened the banking sector in the UK with remarks that the sector is not facing stresses from the financial sector saga. Stocks tank despite the ease in the banking sector.

EURUSD traded +0.20% above the 1.0800 mark as the dollar loses its safe-haven appeal on receding banking concerns. The pair’s upside was quite weak ahead of ECB President Lagarde, Villeroy, and Nagel’s speeches at the BIS Innovation Hub Euro system centre opening ceremony.

In the US the CB consumer confidence along with the goods trade balance will be due in the New York trade. The fiber is currently sitting on a 1.0800 intraday low while bulls may reclaim 1.0900 immediate resistance. However, a slide below 1.0720 may sustain some selling pressure.

USDJPY dipped -0.46% as traders preferred the Japanese Yen for a safe-haven bid on Tuesday. Early Tuesday the Bank of Japan Core Consumer Price Index, its preferred gauge of inflation, dropped to 2.7% from a previous print of 3.1%.

The data however failed to weaken the Yen together with BoJ’s outgoing Governor Haruhiko Kuroda’s remarks where he defended the ultra-loose monetary policy. Currently, the pair is trading between 132.00 and 130.00 psychological levels. A breach below may give bears 127.50 while a rally above may set targets at 132.50 and 133.00.

GBPAUD lost -0.22% after BoE’s Andrew Bailey speech in European trade. The sterling failed to capitalize on the Governor’s speech where he emphasized that the banking sector in the UK was not facing any stress from the recent banking turmoil. On the other hand, the Australian dollar gained on the dollar weakness along with a boost from more-than-expected retail sales data. Retail Sales month-on-month were at 0.2% against expectations of 0.1% though it was lower than the previous 1.8%. GBPAUD sellers faced a challenge at 1.8400 after dropping from 1.8480. Bears may retest 1.8320 before buyers rally to 1.8780.

European stocks traded lower as sellers pared early gains inspired by the region’s banking sector recovery. The UK100 was down -0.43% below the 7500 figure as bears may reclaim 7400. The CAC40 lost -0.40% as it slid towards the 7050 level. DAX traded -0.24% lower after poking above the 15200 mark.

US stock futures went south in European trade. The US100 futures were down -0.34% after establishing resistance at 12700 and may revisit 12500. US30 futures tanked -0.17% back below the 32500. US500 futures lost -0.26% still under some pressure below the 4000 level.

Elsewhere, treasury yields extended gains on Tuesday having the benchmark US 10-year treasury bond yields climb +1.10% from 3.500% as it heads to 3.600%.