Commerzbank Research Team notes a significant decline in Oil prices, with Brent trading down over USD 4 from last week's close. The report attributes the drop to geopolitical tensions and production adjustments from OPEC+.

Remarks from Federal Reserve Governor Stephen Miran lean decisively dovish, challenging the idea that current policy settings remain appropriate. The focus is on subdued underlying inflation, limited pressure from market yields, and scope for sizeable rate cuts this year.

Kevin Warsh has been nominated by President Trump to be the next Fed chair, but his confirmation process may be complicated. Warsh's past as a hawk has shifted towards a more dovish stance in recent years.

The Euro (EUR) has given away previous gains against the US Dollar (USD) on Tuesday, returning below 1.1800, and trading at 1.1780 at the time of writing.

Rabobank analysts, Molly Schwartz and Christian Lawrence, anticipate that Banxico will hold the policy rate at 7.00% during the February 5 meeting. This expectation is shared unanimously among Bloomberg surveyed analysts.

Brown Brothers Harriman (BBH) analysts report that the Reserve Bank of Australia (RBA) has raised the cash rate target by 25bps to 3.85%, marking the first increase since 2023. This decision was largely anticipated by the market, with inflation expected to remain above target for some time.

Brazil Industrial Output (YoY) came in at 0.4% below forecasts (1%) in December

Brazil Industrial Output (MoM) came in at -1.2%, below expectations (-0.8%) in December

BNP Paribas highlights a positive outlook for the Eurozone, forecasting robust GDP growth of 1.5% in 2026, bolstered by recovering industry and household purchasing intentions. The report notes that Europe is overcoming challenges such as the war in Ukraine and political uncertainty in France.

The Pound Sterling (GBP) trades lower against its major currency peers on Tuesday as traders shift their focus to the Bank of England’s (BoE) monetary policy announcement on Thursday.

DBS Group Research report, authored by Radhika Rao, notes that the US and India have agreed on a trade deal, reducing tariffs on Indian goods from 25% to 18%. This agreement is contingent on India's continued reduction of oil purchases from Russia.

The USD/JPY extends its winning streak for the third trading day on Tuesday, trades 0.24% higher to near 156.00 during the European trading session.

TD Securities discusses the Eurozone's inflation expectations ahead of key economic data releases. The report anticipates a dip in headline inflation to 1.7% y/y, which is aligned with previous forecasts. The ECB views this as a temporary deviation, suggesting no immediate monetary policy shifts.

Rabobank's RaboResearch Team has noted a rally in European gas prices, which reached €43/MWh due to below-average storage levels and severe cold weather.

USD/CHF trades lower around 0.7780 on Tuesday, down 0.15% on the day at the time of writing. The pair remains under pressure as political uncertainty in the United States (US) weighs on the US Dollar (USD), despite the release of encouraging economic indicators.

Gold (XAU/USD) climbs more than 5% on Tuesday as dip buyers step back into the market following last week’s violent correction from record highs near $5,600. At the time of writing, XAU/USD is hovering near $4,915, extending its rebound after slipping to near four-week lows around $4,402 on Monday.

Germany 10-y Bond Auction declined to 2.79% from previous 2.85%

The AUD/USD pair trades almost 1% higher, slightly above 0.7000, during the European trading session on Tuesday. The Aussie pair demonstrates significant strength as the Australian Dollar (AUD) outperforms its peers, following the Reserve Bank of Australia’s (RBA) monetary policy announcement.

United Kingdom 10-y Bond Auction: 4.585% vs 4.456%

The Canadian Dollar (CAD) started 2026 at its strongest level against the USD since 2024, driven by rising commodity prices and a reversal in speculative positioning.

The Indian Rupee (INR) gains sharply against the US Dollar (USD) on Tuesday, following the confirmation of a long-awaited trade deal between the United States (US) and India the previous day. The USD/INR pair opens with a gap down to near 90.35, the lowest level seen in almost three weeks.

The US Dollar (USD) has rebounded at the start of the week, bolstered by President Trump's nomination of Kevin Warsh for Fed Chair and positive economic indicators.

The Deutsche Bank report highlights that the Australian Dollar gained strength after the RBA raised its benchmark cash target rate by 25 basis points to 3.85%.

Silver prices (XAG/USD) rose on Tuesday, according to FXStreet data. Silver trades at $86.81 per troy ounce, up 8.58% from the $79.95 it cost on Monday.

AUD/JPY extends its gains for the second successive sessions, trading around 109.40 during the European hours on Tuesday.

The two-year swap rate gap widened in favor of the Dollar, impacting the short-term fair value estimate for EUR/USD. Technical supports are identified near the 50-day moving average. Political stability in France is noted, but its impact on FX remains marginal, notes Francesco Pesole from ING.

The US Dollar Index (DXY) is trimming gains on Tuesday, trading at 97.45 at the time of writing after failing to extend gains past a previous support level, now turned resistance, at the 97.75 area.

The Japanese Yen has come under renewed pressure, with USD/JPY trading at 155.50. The lack of concrete follow-up to verbal interventions and political statements regarding a weak currency have contributed to this weakness.

Dow Jones futures rose 0.12% to around 49,580 in the European session on Tuesday, while S&P 500 and Nasdaq 100 futures climbed 0.27% and 0.57% to near 7,020 and 26,000, respectively. Investors now look ahead to a busy earnings slate later in the day, including results from AMD, Pfizer, and Chipotle.

Gold (XAU/USD) rallies back closer to the $4,950 level during the first half of the European session on Tuesday amid some follow-through short-covering after two days of heavy liquidation.