The macro news will continue to play a second fiddle to the Italian political and Brexit-related headlines while the US-Saudi tensions will also continue to drive the market sentiment.
Italy told the European Commission on Monday it would stick to its contested 2019 budget plans in defiance of EU fiscal rules and the European Commission will decide on its response on today. The euro is trading at 1.1457 against the Dollar, heading to European session.
The British pound stood at 1.2962 against the Dollar, hovering just above this month’s low of $1.2922 on fears the Irish border issue and disagreements within Britain’s ruling Conservatives over Brexit could see Prime Minister Theresa May face a serious leadership challenge.
The Japanese yen, a safe haven in uncertain times, firmed against the dollar on Tuesday, currently trading at 112.50, gaining as risk-shy investors retreated from Asia’s main share markets.
In commodity markets, Gold prices inched up on Tuesday morning in Asia as Asian stock markets fell amidst escalating geopolitical tensions over the killing of journalist Jamal Khashoggi and concerns over Italy’s budget. Gold Futures rose to $1,224.6 per troy ounce, impacted by drops in Asian equity markets. On the other hand, Oil prices dipped on Tuesday as top crude oil exporter Saudi Arabia has pledged to keep markets supplied despite its increasing isolation over the killing of the Saudi journalist, easing fears that the Saudis may use oil production as their diplomatic weapon.
A light macro calendar ahead today, as the German PPI, UK CBI industrial trends survey and BOE Chief Economist Haldane´s speech will offer some trading impetus in the European session while the BOE Governor Carney´s speech is due during the NA trades.
Also, of note will be the speeches by the FOMC members Kashkari, Bostic and Evans among a couple of other US minority data releases. At 14:00 GMT, the Eurozone consumer confidence data will be reported while the API weekly crude stocks data will be published at 20:30 GMT.