Welcome to Wednesday, traders! Today’s economic calendar is packed, with a strong focus on monetary policy and inflation data. The highlight of the day so far has been the Reserve Bank of New Zealand (RBNZ) cutting interest rates by 50 basis points, marking the first move in what is expected to be a series of rate cuts this year.
RBNZ Governor Adrian Orr commented that the bank expects another 50 basis points of cuts by mid-year, likely in 25 basis point steps. He also pointed out that near-term risks include slower GDP growth, while longer-term concerns revolve around U.S. tariffs and their impact on global growth. The market’s reaction was clear—the New Zealand dollar strengthened sharply, making it the strongest currency of the day.
Meanwhile, the currency market is seeing further movements, with strength in the Japanese yen, Australian dollar, and European currencies, while the U.S. dollar is showing mild weakness ahead of the European session. The British pound could see some volatility later in the day as the UK inflation report is released, with expectations set at 2.8%. However, the most important event of the day will likely be the FOMC meeting minutes, which will offer deeper insights into how the Federal Reserve is viewing inflation and potential rate adjustments.
Looking at market movements, indices remain close to all-time highs, despite a small bearish correction attempt on Tuesday, particularly in the U.S. markets. However, indices quickly rebounded, maintaining strong bullish momentum as investors continue to ignore bearish signals and push equities higher.
In commodities, oil is attempting a bullish reversal, trying to recover after recent weakness. Meanwhile, gold and silver continue their impressive rally, with gold up nearly 12% year-to-date and silver surging 14% in 2025, making precious metals among the top-performing assets so far this year.
With UK inflation data and the FOMC minutes still ahead, markets remain cautious yet optimistic, as traders position themselves for potential shifts in monetary policy and key levels in currency and equity markets.