Summary:
U.S. stocks advanced in a broad rally on Tuesday, and the dollar softened as robust economic data eased recession fears and stoked investors' risk appetite.
U.S. stocks advanced in a broad rally on Tuesday, and the dollar softened as robust economic data eased recession fears and stoked investors' risk appetite.
Gold prices softened as upbeat economic reports dulled the safe-haven metal's luster. Oil slumped over 2% on signals of more rate hikes and lower summer consumption.
Commodities
Benchmark 10-year Treasury yields climbed, making zero-interest-bearing gold less attractive. Gold has shed about 2.6% this month, set for a second consecutive monthly fall if losses hold.
‘the key question is the extent to which the internal tensions within Russia or any potential toppling of the government might affect global monetary policy,’ Commerzbank analysts wrote in a note.
U.S. inventory data from the API showed that U.S. crude stocks fell by about 2.4 million barrels in the week ended June 23, according to market sources citing the data.
Brent's six-month backwardation reached its lowest since December and was barely positive, indicating shrinking concern about supply crunches.
Forex
The greenback retreated further after data showed new orders for U.S.-manufactured capital goods unexpectedly rose in May, indicating some caution remained among businesses for new capital investment.
Additional data on single-family new home sales in May and home prices in April also indicated the housing market has been able to weather rising interest rates from the Fed.
Morgan Stanley said on Tuesday it was now expecting the Fed to hike its key interest rate by 25 basis points in July, from an earlier estimate of a pause, raising its terminal rate forecast to 5.375%.
The Canadian dollar steadied after rebounding from multi-year lows, while the US dollar dropped as Trump paused new tariffs on Mexico for one month.
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Gold prices fell in early Asian trade as the dollar strengthened following Trump's new tariffs on Canada, Mexico, and China.
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The Singapore dollar reached a one-month high after MAS eased policy, while the dollar had its weakest week since November 2023.
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