Market mood improves ahead of US confidence data

Wall Street’s main indexes ended up closing the first day of the week in positive territory and the greenback lost some interest. The US Dollar Index is consolidating its recent gains near 99.00 early Tuesday and the benchmark 10-year US Treasury bond yield stays relatively quiet below 2.5% after reaching a multi-year high of 2.55% on Monday. Later in the day, the Conference Board’s Consumer Confidence Index and January Housing Price Index will be featured in the US economic docket.

The market mood remains relatively upbeat heading into the European session with US stock index futures rising 0.2%. Earlier in the day, China’s Shanghai city announced that they will roll out economic policies to help firms through the latest coronavirus lockdown. Additionally, China Securities Times said the People’s Bank of China was expected to lower the reserve requirement ratio (RRR) soon. Meanwhile, the Financial Times reported that Russia was no longer going to demand Ukraine be “denazified” in the upcoming negotiations.

EUR/USD fell below 1.1000 on Monday but closed the day virtually unchanged slightly below that level. The pair is moving sideways early Tuesday.

GBP/USD lost more than 100 pips on Monday and was last seen fluctuating in a tight range near 1.3100. Bank of England (BOE) Governor Bailey noted that they were beginning to see evidence of a slowdown in growth. Commenting on the May rate decision, “the situation is very volatile,” Bailey said.

USD/JPY surged to a multi-year high of 105.11 on Monday on the Bank of Japan’s (BOJ) decision to conduct unlimited fixed-rate purchase operations for the 10-year Japanese government bonds. During the Asian session, Japan’s Finance Minister Shunichi Suzuki said that they are closely watching market moods to avoid negative JPY weakness. USD/JPY is trading in negative territory around the mid-123.00s heading into the European session.

Gold fell sharply on Monday amid rising US T-bond yields but seems to have steadied above $1,920 early Tuesday.

Bitcoin managed to build on the previous week’s rally and registered gains for the seventh straight day on Monday. As of writing, BTC/USD was up nearly 1% at around $47,500. Ethereum preserves its bullish momentum and trades at its highest level in more than two months near $3,400.

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