German Final CPI, U.S. CPI, Federal Budget Balance

The euro traded between gains and losses on Tuesday and finally ended with moderate loss of 0.29% against the dollar, as investors wait for the outcome of debt ceiling talks and inflation data later today.

The U.S. Congress appears divided regarding a possible rise in the federal government's debt ceiling, which currently stands at over $31 trillion but risks running out of cash as soon as June 1.

The inflation (CPI) report for April from the U.S. is also in the spotlight as investors look for clues on whether the Federal Reserve will continue to hike interest rates at its June meeting. Forecasts show an increase of 5% from a year ago.

Gold prices moved slightly on the upside on Tuesday, ending the session with a gain of 0.74% gain following signs of renewed uncertainty in the markets, as traders are focusing on the debt ceiling impasse on Capitol Hill, with the Treasury Secretary warning the government might be unable to pay debts by June 1.

As the U.S. flirts with a possible default, most US banks are tightening their lending standards, something that could add further pressure on economic growth and support demand for safe-haven assets.

U.S. data remain in the spotlight for investors looking for more clues regarding the health of the economy and the status of global growth. Inflation data, due on Wednesday could attract investors attention.

WTI oil continues trading higher, further cementing the recovery seen in the past week, marking a fourth consecutive daily gain on Tuesday by 0.85%.

An unexpected increase in U.S. oil stocks added some pressure on WTI as it raised concerns over demand, with U.S. crude inventories rising by about 3.6 million barrels in the week ended May 5, while gasoline inventories rose by 399,000 barrels, according to data from the American Petroleum Institute.

Investors now wait for U.S. inflation data to assess the next rate decision in the top oil consuming nation. The market is also waiting the monthly oil report from the Organization of the Petroleum Exporting Countries (OPEC) due on Thursday for clues to whether the group and its allies will need to cut output again to boost prices.

The main U.S. stock market indices posted some small fluctuations on Tuesday, with the US 500, the US 30 and the US Tech 100 ending the session slightly into negative territory as investors are watching closely the developments from a meeting between President Biden and House Speaker Kevin McCarthy over the debt ceiling.

The deadline is approaching the U.S. Congress to decide on whether to increase the federal government's debt ceiling, which currently stands at over $31 trillion but risks running out of cash as soon as June 1. At the same time the majority of banks are tightening their credit conditions which according to JPMorgan analysts, this will have the same impact on the economy as a rate hike.

In the spotlight for today, could be the Labor Department's inflation report which is expected to show the consumer price index (CPI) likely climbed 0.4% in April after gaining 0.1% in March.