In line with predictions from the previous Macro Overview, market movements continue to be influenced by statements from U.S. President Donald Trump made earlier this week. Trump announced that the 25% increase in import tariffs on goods from Canada and Mexico will still take effect on March 4. The risks of a larger trade war have surged, affecting market dynamics.
Additionally, data releases from the United States later tonight could be significant market movers as concerns about economic slowdown strengthen. Below is the data from Trading Central:
Recommended
Recommended
Recommended
Recommended
- US Consumer Sentiment (Feb) at 10:00 PM WIB; forecast 103 compared to a previous 104.1.
GOLD
Gold prices (XAUUSD) have trimmed losses after reaching a daily low of $2,929.46 per troy ounce. Compared to the closing prices from Monday’s trading, Gold is down by $22.77 or 227.7 pips.
The sentiment towards Gold remains bullish largely due to high uncertainty, particularly surrounding trade war risks and signs of an economic slowdown in the US. Today’s decline in Gold is likely due to profit taking. As a result, if the U.S. consumer sentiment data tonight is published lower than the forecast, Gold may gain positive sentiment once again. A drop in sentiment below 100 would indicate consumers are pessimistic about the economic outlook.
OIL
Oil prices (CLS10) reversed course, declining after reaching $71.23 per barrel. Oil remains under negative sentiment due to indications of an economic slowdown in the United States, which poses risks to oil demand.
This means if economic data from the U.S. tonight is released lower than the forecast, oil sentiment will become even more bearish.
EURUSD
EURUSD hasn’t shown much movement at the start of the European trading session, hovering between 1.04563 – 1.04803. This currency pair is still overshadowed by negative sentiment stemming from trade war risks, especially with Europe facing potential impacts from proposed tariff increases on steel and aluminum set to start on March 12.
On the other hand, the European Union has indicated that it is preparing a list of American products that will face import tariffs in response. However, if U.S. economic data tonight comes in lower than the forecast, or drops below 100, EURUSD could see positive sentiment.
GBPUSD
The movement of this currency pair resembles that of EURUSD, trading within a narrow range of 1.26056 – 1.26387. The release of U.S. consumer sentiment data this evening is also expected to significantly impact the market.
There is a chance GBPUSD will experience positive sentiment if the U.S. consumer sentiment data comes in below the forecast.
USDJPY
USDJPY has turned down to 149.197 at the start of the European trading session after rising to 150.300 earlier this morning. This movement indicates that the yen remains strong, supported by the potential for the Bank of Japan (BoJ) to raise interest rates soon.
Thus, if U.S. economic data tonight is released lower than the forecast, USDJPY could be under further pressure.
Nasdaq
Selling pressure on the Nasdaq continued, hitting a daily low of 21,303 at the start of European trading. Compared to Monday’s closing, Nasdaq has dropped by 124 index points.
Wider trade war risks, along with signs of an economic slowdown in the U.S., are exerting strong pressure on the Nasdaq. This pressure could intensify if the U.S. consumer sentiment data comes in lower than the forecast.
