US indices bounced back strongly in Tuesday’s session as the yesterdays losers in big tech became the winners as strong data encouraged traders to buy the dip. MSFT, AMZN, META and TSLA all posted strong sessions after Mondays sell-off, helping the Nasdaq to outperform, finishing up over 200 points or +1.65%

Risk sentiment was spurred by strong data out of the US, showing the resilience of the US economy with both housing data (New Home Sales +763k vs 677k expected) and Consumer confidence figures (109.7 vs expected 103.9) easily beating consensus.

FX Markets

USD sold off on Tuesday on month-end selling and a risk on session reducing the demand for the Dollar further despite strong US data. The Dollar Index fell from highs of 102.80 seen in the Asian session to drift lower during US hours to a low of 102.32, DXY still holding above the major 102 support level and trend line for now.

EUR saw gains as the Dollar sold-off, also helped by several hawkish ECB speakers. ECB’s Kazaks pushed back on rate cuts in 2024 and President Lagarde noted the ECB cannot declare victory on inflation just yet. EURUSD reclaimed the psychological 1.09 level, which acted as support,  before pushing to a high of 1.0976 before re-tracing modestly.

JPY was weaker despite a softer USD as it primarily traded off rising rate differentials with US Treasury yields rallying on strong US data. USDJPY restarting its slow march to 145 it seems after breaching and holding a 144 handle. Recent BoJ jawboning, signaling a possible intervention incoming, seeming to fall on deaf ears for now.

Gold dipped again as rising yields and a risk-on market saw haven flows dry up. XAUUSD again attempting to reclaim the 1933 level, which was strong support up until recently, but again found stiff resistance seeing XAUUSD dip to last weeks lows of 1910 USD an ounce.

Today’s economic calendar see a diverse selection of central bank speakers, including more from ECB president Lagarde and Fe Chair Jerome Powell. Aussie CPI will also be one to watch, with the market split on the RBA’s next move, we could see some action in the AUD over this figure if we get a surprise either way.