Hello traders, and welcome to Thursday! We're coming off the back of the FOMC meeting minutes from yesterday, where the Federal Reserve indicated a likely rate cut coming in September. The summary revealed that most participants at the July meeting felt that, if the economic data continued to align with expectations, easing policy at the next meeting would be appropriate. This would mark the first rate cut since the emergency measures taken during the early days of the COVID crisis. Markets have already fully priced in this September cut, which could have significant implications moving forward.
Today is a big day for economic data, as we have PMI releases from major economies including France, Germany, the Eurozone, the UK, and the US. As has been the trend recently, manufacturing PMIs are expected to remain below 50, indicating contraction, while services PMIs are expected to stay above 50, reflecting growth in that sector.
As we start the day, we're seeing declines in precious metals, with both silver and gold moving lower. Oil is also facing challenges, continuing to struggle in early trading. In the currency market, safe haven currencies like the Japanese yen and Swiss franc are the strongest performers at the moment, while the Australian dollar, British pound, and New Zealand dollar are among the weakest.
Futures are entering the European session in the red, signaling a cautious start. However, despite this, the major indices remain strong, holding their ground and continuing to perform well. Over the past couple of days, we've noticed a resurgence in safe haven currencies, suggesting that the bullish correction in pairs involving the Swiss franc and Japanese yen may be nearing its end.