U.S. Durable Goods Orders, German ifo Business Climate

The Euro appreciated against the US Dollar on Tuesday and ended the session with moderate gains of 0.49% as softer than expected US economic data weighed on the Greenback.

Data from the United States (US), revealed by S&P Global on Tuesday, showed that business activity in the manufacturing sector shrank. The Manufacturing PMI slipped from 51.9 to 49.9 this month. On the other hand, the Services and Composite Index decelerated from 51.7 and 52.1 to 50.9, in both readings.

Across the pond, Eurozone HCOB PMIs were solid, with the composite index rising from March’s 50.3 to 51.4 this month, while the services edged up from 51.5 to 52.9. the outlier was the Manufacturing PMI, slipping from 46.1 to 45.6.

Gold prices posted minor losses on Tuesday on diminishing fears about an escalation of tensions in the Middle East, with investors awaiting key economic data for further clarity on the timeline on U.S. interest rate cuts.

Israeli strikes intensified across Gaza in some of the heaviest shelling in weeks, but with fears of a wider conflict receding after Iran said last week it had no plan to retaliate following an apparent Israeli drone attack, financial markets showed signs of sharper appetite for risk.

The market is also closely monitoring signals from the U.S., where inflation data and statements from the Federal Reserve indicate that interest rates may not be cut in June.

Oil prices rose by more than a dollar a barrel on Tuesday as the U.S. dollar fell to its lowest level in more than a week and investors shifted their focus away from tensions in the Middle East to the state of global economies.

More support for prices came from euro zone data that showed business activity expanding this month at the fastest pace in nearly a year. Moreover, Investors are looking to the release later this week of U.S. first-quarter gross domestic product data as well as the March figures for personal consumption expenditures, the Fed's preferred inflation gauge.

The American Petroleum Institute reported on Tuesday that U.S. crude oil and gasoline stockpiles fell last week. The U.S. government's official data will be published by the Energy Information Administration later today.

U.S. stocks closed higher on Tuesday following positive earnings from top-tier companies and as investors were focused on quarterly results from Magnificent Seven and other megacap growth stocks.

Tesla kicked off the earnings cycle for technology heavyweights after markets closed on Tuesday, announcing the launch of new electric vehicle models and quarterly revenue that missed analyst estimates. That will be followed by results from other tech majors, including Microsoft, Alphabet, and Meta Platforms, later this week.

Data on Tuesday showed that U.S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply, suggesting possible relief ahead for rising consumer prices.