The Canadian economy expanded 2.3 percent on quarter in the last three months of 2020, following a record 8.9 percent growth in the previous period supported mostly by a large change in business inventories, as well as increases in government final consumption expenditure, business investment in machinery and equipment, and housing investment. Meanwhile, household spending edged down 0.1 percent, after a 13.1 percent increase in Q3. Housing investment increased 4.3 percent, namely new construction (4.1 percent), renovations (4.8 percent) and ownership transfer costs (4.1 percent). Business investment in engineering structures rose 1.6 percent but investment in non-residential buildings fell 10.9 percent. Exports increased 1.2 percent while imports went up 2.6 percent. In 2020, real GDP shrank 5.4 percent, the most since comparable data become available in 1961, due to the coronavirus pandemic.

Spot gold traded higher at $1,730 per ounce on Tuesday afternoon, up from an eight-month low of $1,707 hit earlier in the session and ending a five-day losing streak. Gold has been under pressure as the recent rally in bond yields, which was seen as a sign of economic optimism, prompted investors to sell some of their positions. At the same time, hopes of a global economic recovery have been supported by the continued stimulus measures from central banks worldwide and the rollout of COVID-19 vaccines. Signals that the Fed will be keeping monetary policy extremely easy for the foreseeable future could provide some support to the yellow metal.

US stocks fell on Tuesday, following big gains in the previous session which saw the S&P 500 booking its best day since June and both the Dow and the Nasdaq rising the most since November. Tech shares such as Apple, Microsoft and Tesla were among the worst performers amid valuation concerns. Meanwhile, Treasury yields were around the flatline and remained well below 1-year high levels seen in the previous week. On the political front, the Senate could pass the $1.9 trillion stimulus plan as soon as this week although it won't include the $15 an hour minimum wage. Traders will also keep a look on comments made by Securities and Exchange Commission Chair nominee Gary Gensler and Federal Reserve Governor Lael Brainard later in the day.

The DAX 30 ended up 0.2% at a new two-week high of 14,040 on Tuesday, while other European bourses closed mixed, as bond yields continued to retreat following last week's rally. Meanwhile, investors worried about bubbles in global markets and weak economic data from Germany. Guo Shuqing, chair of the China Banking and Insurance Regulatory Commission, said that financial markets in Europe, the US and other developed countries were trading at high levels, and that they had “seriously diverged” from the real economy. On the economic data front, German retail sales tumbled 4.5% in January, following a record 9.1% plunge in December and compared with market expectations of a 0.3% fall. The monthly jobless report for February showed an increase of 9 thousand in unemployed people, compared with forecasts of a 13 thousand decline. Elsewhere, Germany plans to extend its coronavirus lockdown until March 28 while easing some restrictions from next week, according to media reports.

Propane prices in Mont Belvieu, Texas, rose to above 0.95 cents per gallon for the first time since October of 2018 and are up more than fourfold from an all time-low hit in April, when lockdowns sent energy prices collapsing. Sales to stuck-at-home Americans and restaurants trying to maintain outdoor dining patrons warm more than offset sluggish autumn and early winter sales to homes heated with propane. On top of that, prolonged frigid temperatures across the US in February boosted heating demand to levels not seen since 2004. Before, a combination of a cold snap in Asia and Saudi Arabia’s oil output cuts created a squeeze for the fuel and led to a surge in US exports.

The ISM New York Index decreased to 35.5 in February of 2021 from 51.2 in January. The reading pointed to the steepest contraction in business activity since May. Employment retreated (41.1 vs 60.6), purchases fell further (35.3 vs 35.7), price pressures intensified (76.5 vs 71.4) and both current (35.3 vs 35.7) and expected (47.1 vs 57.1) revenues worsened. Meanwhile, the Six-Month Outlook fell for the second month in a row to a 3-month low of 51.5.

Chicago ethanol futures skyrocketed to a six-year high of $1.775 per gallon in March, moving in tandem with gasoline prices in the aftermath of a record drop in production following last month’s winter blast that shut down wells and processing plants. Markets were already basking in the glow of scarce supply as many ethanol producers were already cutting production as they faced negative margins for much of 2020.

The dollar index came under renewed selling pressure on Tuesday, depreciating below the key 91 level as lower Treasury yields dampened the appeal of holding the greenback. Furthermore, the recent tumult in the bond market sparked speculation amongst investors that the Federal Reserve may have to tweak policy soon to soothe concerns about the quick jump in longer-term yields. The most pronounced selling activity was against the Australian and New Zealand dollars, as investors continue to cheer a resumption of economic activity in both countries.

The South African rand traded slightly higher at below 15 against the greenback on Tuesday, supported by optimism surrounding the further relaxation of lockdown restrictions as the country moves to rebuild its virus-shattered economy and as investors continued to monitor movements in bond markets. Meanwhile, South Africa's public sector unions said they wanted a general salary rise of consumer inflation plus 4% for all workers this year, as they entered negotiations with the government, which has vowed to freeze public sector wages for the next three years.