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Spreads
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In the Eurozone, multiple leaks in Russia’s gas pipeline in the Baltic Sea raise concerns about the escalating energy conflict between Europe and Russia, which pushed European natural gas prices higher and exerted bearish pressure on investors’ moods.
US stocks declined on Tuesday, dropping for the sixth session and ending a volatile session lower as the fears of a worldwide recession keep leading the market sentiment.
The safe-haven US dollar continued to find demand after the Fed delivered a third jumbo hike and warned of more pain to come, meanwhile Federal Reserve’s James Bullard also added to a chorus of officials saying more rate hikes are needed and the risks to the economy remain elevated. Some US Federal Reserve officials tried to pour cold water into the dollar’s recent strength but failed despite Fed’s Charles Evans saying he was getting concerned about going too far, too fast with rate hikes.
The benchmarks, S&P 500 and Dow Jones Industrial Average both declined lower on Tuesday as the harsh central bank tightening programs sparked the S&P 500’s longest losing streak since February 2020. The S&P 500 was down 0.2% on a daily basis and the Dow Jones Industrial Average also dropped lower with a 0.4% loss for the day. Seven out of eleven sectors in the S&P 500 stayed in negative territory as the Consumer Staples sector and the Utility sector are the worst performing among all groups, losing 1.76% and 1.70%, respectively. The Nasdaq 100 meanwhile advanced slightly with a 0.2% gain on Tuesday and the MSCI World index was down 1.3% for the day.
Main Pairs Movement
The US dollar climbed higher on Tuesday, extending its previous rally and touched a daily high above the 114.40 mark during the US session amid the risk-off market sentiment. On top of that, the firmer US Durable Goods Orders and CB Consumer Confidence data also acted as a tailwind for the safe-haven greenback, as the US Durable Goods Orders declined by only 0.2% in August and US CB Consumer Confidence also improved to 108.00 for September.
GBP/USD rebounded slightly on Tuesday with a 0.43% gain after the cable recovered towards the 1.080 level amid the overnight special statement from the Bank of England. On the UK front, the BoE added that it is monitoring developments in financial markets very closely. Meanwhile, EUR/USD remained under pressure and finished the day right below the 0.9600 mark amid a risk-off market mood. The pair was down almost 0.15% for the day.
Gold rebounded with a 0.40% gain for the day after climbing to a daily top above the $1,640 mark during the European session, as some profit-taking witnessed in the US dollar earlier in the day has provided support to the safe-haven metal. Meanwhile, WTI Oil advanced higher with a 1.94% gain for the day after recovering towards the $79 area despite hawkish rhetoric from Fed officials.
Economic Data
| Currency | Data | Time (GMT + 8) | Forecast |
| AUD | Retail Sales (Aug) | 09:30 | 0.4% |
| EUR | ECB President Lagarde Speaks | 15:15 | – |
| USD | Pending Home Sales (Aug) | 22:00 | -1.4% |
| USD | Fed Chair Powell Speaks | 22:15 | – |
| USD | Crude Oil Inventories | 22:30 | 0.333M |
