Market Snapshot – Safe Have Assets Fall, US Dollar Steady

Global Stocks Consolidate Recent Gains

European stock markets are narrowly mixed, with DAX and FTSE 100 outperforming and posting slight gains, while French, Italian and Spanish markets are slightly in the red.

The DAX managed to shrug off much weaker than expected orders data at the start of the session, which reduced pressure on the ECB to drop the easing bias on the rate outlook at Thursday’s council meeting. Asian markets mostly managed modest gains, but the Nikkei closed with a -0.18% loss and investors remain cautious going into this month’s round of central bank meetings with speculation of a March Fed hike ripe.

Safe Haven Assets Fall on Strong Dollar and Rate Hike Expectations

Safe haven assets are trading lower on Tuesday morning as the US dollar strength dominates the markets.

Gold futures are drifting lower as the move represents rising concerns over additional rate hikes this year from the Fed besides the March hike, which has already been priced into the market.

The gold is trading at 1221.75 down 0.31% while silver is also in red, 0.81%. Bitcoin, which climbed fairly since the beginning of the year, dropped 3.45% to trade at 1237.

Crude Oil Lower as OPEC Consider to Extend Output Cuts

Crude oil futures are trading higher in a tight range on Tuesday. Helping to put a lid on prices are concerns over rising U.S. shale output. Supporting the market is strong compliance with OPEC’s plan to reduce production and trim the supply glut.

Russia continues to be the wildcard in this market. Currently, it is showing limited participation in the OPEC strategy by reducing production by only one-third of its pledged amount. Prices could scream to the upside if it decides to meet its promise.

Traders are also saying that an extension of the OPEC program will be supportive for higher prices. However, all things being equal, the market is likely to be driven the rest of the week by the inventory figures in Tuesday’s American Petroleum Institute’s inventories report and Wednesday’s similar report from the U.S. Energy Information Administration.

US Dollar Steady as Rate Hike Probability Continues to Rise

The U.S. Dollar is picking up strength as investors price in not only a March rate hike, but also the strong possibility of a rate hike every quarter this year. March rate hike probability set up on 84.1%, May rate hike bets rose to 40%.

Rising U.S. Treasury yields and increasing odds that the Fed may raise rates multiple times this year are helping to underpin the Greenback. Traders are also positioning themselves ahead of Friday’s U.S. Non-Farm Payrolls report.

The US Dollar Index is trading 101.77, up 0.10%. GBP/USD is trading below 1.22.