Photo

After a risk-on Monday, markets are on the back foot on Tuesday following a bubble warning from China. The Feds dismissal of higher yields boosts the dollar and contrasts the approach from other central banks. Bitcoin is moving up while gold and oil retreat. Speeches from Fed officials are eyed. 

Bubble? Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission warned about bubbles in foreign markets and properties, contributing to a downturn in Asian stocks and US futures. The "turnaround Tuesday" has come after shares rallied on Monday, greeting the new months with optimism. 

The US ISM Manufacturing Purchasing Managers Index jumped to 60.8 in February, indicating rapid growth. The Prices Paid component leaped above 80, implying inflationary pressures.

US ten-year yields have remained contained around 1.40%, allowing markets to recover on Monday but enough to support the dollar. Thomas Barkin, president of the Richmond branch of the Federal Reserve, dismissed concerns about higher returns on US debt and focused on the fact that ten million Americans are out of work.

Fed Governor Lael Brainard and stands out among speakers on Tuesday, ahead of Chair Jerome Powells speech on Thursday. The worlds most powerful central bank stands out among its peers – officials at the European Central Bank have signaled they are ready to act to push yields lower. EUR/USD is under pressure, nearing 1.20.  Preliminary Consumer Price Index figures from the eurozone for February are set to remain subdued.

The US Senate will reportedly pick up President Joe Bidens $1.9 trillion stimulus bill on Wednesday. The upper chamber is set to strip a minimum wage hike out of the Houses legislation, but the final scope of relief is unclear. 

Gold extended its downfall, changing hands at around $1,720 at the time of writing. Higher US yields and growing interest in cryptocurrencies have made gold less attractive to some investors. 

Canada publishes Gross Domestic Product figures for the fourth quarter on Tuesday, with a slowdown on the cards. WTI Crude Oil has stabilized around $60 ahead of the OPEC+ meeting on Thursday. Russia is reportedly seeking an increase to petrol production while Saudi Arabia would like to cap output. 

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 assets. 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 Open Markets 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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Top Tweets About The Story

Top Stories