March US data release on durable goods orders fell short of market expectations holding back the rally in equity markets. US stock indices could barely stay in positive territory on Monday, US equity index futures hovered around the opening today. European indices slid against the backdrop of weak Asian and US equity performance. Accordingly, pressure on the dollar eased somewhat with greenback index extending moderate bullish pullback to the second day, testing 91.00 level.

The US durable goods orders report was a big disappointment as it showed that demand for cars in March was not as strong as expected. Taking into account the sales of light vehicles, the growth averaged to 0.5% against the forecast of 2.5%. Weaker-than-expected change of one of the key drivers of consumption growth reminded the markets of the Fed's opinion on the inflation spike, according to which the US Central Bank considers observed inflation momentum be a temporary phenomenon.

Given the fresh data updates on the US economy, the Fed has less reason to include in its communication hints of early withdrawal of monetary stimulus, in particular, tapering of asset purchases. If the US Central Bank hints on Wednesday that it is not going to tighten policy prematurely, it should have positive consequences for risk assets, helping US stocks to resume advance.

Sovereign debt of developed countries traded without much change on Tuesday while US dollar remained below the 100-day moving average, staying within a tight downward trend channel despite intraday growth:

As for upcoming eco data, its worth to pay attention to the report on consumer sentiment in the United States. A positive surprise may increase pressure on the US currency and support risk assets.

At the past meeting, the Bank of Japan left the volume of stimulus unchanged. Despite economic momentum, the Central Bank did not change inflation forecasts, which put an end to hopes of early policy tightening, discussions of which have recently begun to appear on the market and factored in asset prices. USDJPY bounced off the 107.60 level, taking advantage of support at the mid-term trendline:

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