Canada GDP, U.S. GDP, Core PCE Price Index, Pending Home Sales

The EUR/USD pair edged lower on Tuesday, slipping to around 1.1390  as the US Dollar regained ground despite ongoing uncertainty over US-China trade relations.

Investor sentiment remained cautious following remarks from US Treasury Secretary Scott Bessent, who suggested that China should take the first step toward resuming trade talks. Adding to the uncertainty, conflicting reports from the US and China over alleged communications between President Trump and President Xi Jinping have further dampened expectations of a near-term resolution.

Beyond the geopolitical backdrop, attention now shifts to a busy US data calendar. Key releases this week include the advance Q1 GDP, ISM Manufacturing PMI, ADP Employment Change, and April’s Nonfarm Payrolls (NFP) report.

In Tuesday’s session, the latest US JOLTS Job Openings report showed a weaker-than-expected print of 7.19 million in March, missing both consensus estimates of 7.5 million and February’s revised figure of 7.48 million.

On the European side, additional pressure on the Euro emerged after European Central Bank (ECB) policymakers reiterated the potential for further rate cuts. ECB official and Finnish central bank governor Olli Rehn signaled openness to reducing rates below the neutral level if inflation continues to fall short of the central bank’s 2% target.

Gold prices declined on Tuesday pressured by a firmer US Dollar and renewed investor appetite for risk assets.

Market sentiment improved following reports that US President Donald Trump may consider easing tariffs on autos and car parts, a move that boosted equities and reduced demand for traditional safe havens such as gold.

Despite gold’s year-to-date gains of around 25%—largely fueled by trade-related uncertainty and expectations of a less dovish Federal Reserve—recent US economic indicators have begun to paint a more nuanced picture. The latest data suggests potential cracks in the labor market and rising consumer unease.

Notably, the decline in gold came despite a pullback in US yields. The benchmark 10-year Treasury yield fell 3.5 basis points to 4.17%, while real yields—measured by 10-year Treasury Inflation-Protected Securities (TIPS)—also eased to 1.92%. However, the drop in yields was not enough to counterbalance the stronger dollar and risk-on sentiment.

Crude oil prices dropped sharply on Tuesday, with both Brent and WTI benchmarks closing at their lowest levels since April 10. Investors grew increasingly cautious ahead of a potential production increase from OPEC+ and amid persistent concerns that escalating US-China trade tensions could dampen global demand.

Market sentiment was hit by a Reuters poll showing a majority of economists now expect US tariffs to push the global economy closer to a recession this year. The ongoing trade dispute between the world’s two largest oil consumers—China and the United States—has already prompted analysts to revise down both demand and price forecasts for crude.

Adding to bearish pressure, several OPEC+ members are expected to propose a second consecutive monthly increase in output at the group’s June meeting, according to sources cited by Reuters. Analysts warn that additional supply could exacerbate existing weakness in the market.

Attention now shifts to US crude inventory data, with figures from the Energy Information Administration (EIA) data scheduled for Wednesday.

US stocks climbed on Tuesday as falling Treasury yields, easing tariff concerns, and positive trade signals supported investor sentiment during a busy earnings week.

Markets found support after President Donald Trump announced plans to temporarily ease his 25% tariffs on cars and auto parts. “We just wanted to help [automakers] enjoy this little transition,” Trump said, adding that the short-term relief aims to prevent penalizing companies struggling to secure parts due to supply chain disruptions.

However, the upbeat trade tone was partially offset by political friction, as the White House criticized Amazon for reportedly planning to display Trump’s tariff costs alongside product prices, calling it a “hostile and political act.”

Bond markets rallied Tuesday, dragging Treasury yields lower after the Conference Board’s Consumer Confidence Index fell sharply to 86.0 in April—its lowest level since May 2020—missing the expected 87.7.

Investors are closely watching corporate earnings, with nearly one-third of S&P 500 companies set to report this week. Results from tech giants including Microsoft and Meta Platforms are due Wednesday, while Apple and Amazon will follow on Thursday.