With few big reports to price in, the U.S. dollar struggled as escalating Russia-Ukraine tensions initially lifted demand, but falling Treasury yields and weak U.S. housing data erased gains.

Gold and crude oil rallied on geopolitical worries, while improving risk sentiment later in the session pushed equities higher and drove bitcoin to fresh record highs.

How did your favorite assets trade on Tuesday? We have the deets below!

Headlines:

• RBA meeting minutes: The cash rate is appropriate, but core measure of inflation remains elevated, highlighted offshore risks related to US policy and China’s stimulus
• Switzerland trade surplus jumped from 4.94B CHF to 8.06B CHF in October, its highest on record, as exports (10.2%) outpaced imports (+1.8%)
• Euro Area current account surplus expanded from €35.4B to €37.0B (vs €27.0B expected) in September; August reading revised from €31.5B
• Euro Area final annual inflation confirmed at 2.0% y/y in October; Core CPI steady at 2.7% y/y as expected
• Bundesbank predicts Germany’s economy will stagnate in Q4 as the labor market continues to soften and potential U.S. tariffs limit activity
• ECB member Fabio Panetta wants to “focus on the sluggishness of the real economy” and move official interest rates into “neutral, or even expansionary, territory”
• Russia updated its nuclear doctrine to lower the threshold for a nuclear strike following Ukraine’s use of U.S. ATACMS missiles in the Bryansk region
• Canada’s inflation accelerated from 1.6% y/y to 2.0% y/y in October on slower gas price decreases; Monthly CPI jumped from -0.4% to 0.4% (0.3% expected) while core CPI shot up from 0.0% to 0.4%
• U.S. building permits slipped from 1.43 to 1.42 (1.44 expected) in October; Housing starts fell from 1.35M to 1.31M (1.34 expected)
• FOMC non-voting member Jeffrey Schmid is uncertain how far interest rates can fall or where they will settle
• New Zealand GDT auction yielded a 1.9% gain in dairy prices following last week’s 4.8% increase

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView

With little top-tier data and markets waiting on Trump’s next appointments, traders focused on rising Russia-Ukraine tensions.

Russia updated its nuclear doctrine, lowering the bar for a nuclear strike after Ukraine used U.S. ATACMS missiles in the Bryansk attack. Moscow now considers any attack by a non-nuclear nation with nuclear-power support a “joint attack.”

Crude oil and gold rallied, with WTI hitting $69.70 and gold climbing to $2,630 on geopolitical concerns. The U.S. dollar stayed soft, weighed down by lower 10-year yields and improved risk sentiment. Nvidia optimism and Lavrov’s remarks on Russia doing “everything possible” to avoid a nuclear war helped ease jitters. U.S. stocks gained, while bitcoin surged to fresh record highs near $94,000.

FX Market Behavior: U.S. Dollar vs. Majors:

Overlay of USD vs. Major Currencies Chart by TradingView

The U.S. dollar traded in tight ranges early on, though USD/JPY dipped as the yen regained ground after Monday’s big losses.

The Greenback jumped during early European hours as escalating Russia-Ukraine tensions rattled risk-takers. However, it lost steam before the U.S. session, tracking a drop in 10-year Treasury yields.

Weaker-than-expected U.S. housing starts and building permits, coupled with improving risk sentiment, kept the dollar on the back foot throughout the U.S. session. By the end of the day, the Greenback struggled against its major counterparts as traders shifted to riskier plays.

Upcoming Potential Catalysts on the Economic Calendar:

• Germany PPI reports at 7:00 am GMT
• U.K. CPI and PPI reports at 7:00 am GMT
• U.K. Retail Price Index (RPI) at 7:00 am GMT
• ECB Financial Stability Review at 9:00 am GMT
• U.K. House Price Index at 9:30 am GMT
• ECB President Lagarde to give a speech at 1:00 pm GMT
• FOMC member Barr to give a speech at 3:00 pm GMT
• U.S. Crude Oil Inventories at 3:30 pm GMT
• BOE Member Ramsden to give a speech at 4:00 pm GMT
• FOMC member Cook to give a speech at 4:00 pm GMT
• FOMC member Bowman to give a speech at 5:15 pm GMT

All eyes will be on the U.K.’s October CPI and PPI reports during the European session as traders brace for any potential repricing of their expectations from Bank of England’s (BOE) December meeting.

Speaking of central banks, a parade of speeches from ECB, BOE, and FOMC officials could lead to intraday volatility for their respective currencies. Make sure you’re glued to the tube in case we see increased volatility during their events!

Don’t forget to check out our Currency Correlation tool when taking any trades!