Plenty of activity overnight, with sell-offs across the board. Let’s see how markets deal with the mess that’s left.

The EURUSD made solid gains overnight as the USD weakened. The pair opened the week at $1.10993 and dipped to lows of $1.10984 in the first hour of trade. The euro then climbed for the rest of the session, peaking at $1.12122 late in the day. It has continued its strong performance in early Tuesday trading, currently sitting at $1.12339. The GBPUSD was more volatile as the pound was weakening along with the dollar. The pair started the week at $1.21285 and shot up to an early high of $1.21876 before beginning its fall over the next few hours. The pound dropped to lows of $1.21004 mid-session before staging a recovery, regaining a fair chunk of those losses late in the day. It is currently trading at $1.21554.

The Dow was hammered overnight as China retaliated to the US tariffs. This escalation shook markets, with the Dow still struggling in early Tuesday trading. The index opened the week at 26,472.06 and ticked up to a high of 26,519.06 early in the day. From there however, it was all downhill as the Dow plummeted 1,000 points, hitting a low of 25,517.71 late in the day. It has fallen further this morning and is currently trading at 25,142.84. The Dax opened 170 points lower and continued the downward trend for most of the session. The German index started the week at 11,738.88 and edged up to a high of 11,797.37 early in the day. The Dax was weighed down by trade tensions as it fell to a low of 11,544.33 before closing at 11,620.36.

The day ahead is one that could bring more losses, as markets reel from the huge sell-offs yesterday. As for data and activity today, Australia’s central bank meets later today to discuss interest rates. As there have been interest rate cuts in the previous two meetings, the RBA is expected to keep rates on hold for now as it waits to see the impact of previous rate decisions. The commentary supplementing the decision will be important to take not of as it may give clues into the likely make-up of future monetary policy settings.

Other data published today includes:

NZ – Inflation Expectations

Japan – Leading Indicators

Europe – German Factory Orders

Australia – ANZ Job Ads, Trade Balance, RBA Rate Statement

US – JOLTS Job Openings, IBD/TIPP Economic Optimism, FOMC Member James Bullard speaks

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