Hello and welcome to Wednesday. Today’s economic calendar is quite sparse, with the main focus being the UK inflation data, expected at 2.2%. However, all eyes are on the earnings calendar, which holds a highly anticipated event: NVIDIA is set to release its earnings report after the market closes. This announcement is eagerly awaited, as it could have significant implications for the tech sector and broader market sentiment.
Yesterday, U.S. indices managed a strong reversal from critical support levels. The S&P 500 defended its key horizontal support, the NASDAQ maintained its position above its uptrend line, and the Russell 2000 bounced from a significant horizontal support. As long as these indices remain above these support levels, the sentiment for American stocks stays positive. On the other hand, European indices continue to lag, struggling to keep pace with their American counterparts.
In the currency market, the Japanese yen is showing ongoing weakness. Yesterday, the yen briefly gained strength following reports of a Ukrainian attack deep into Russian territory, which temporarily boosted safe havens. However, these gains were short-lived, and by the end of the day, the yen emerged as the weakest currency—a trend continuing into today. Currently, the strongest performers are the British pound, Canadian dollar, and U.S. dollar. It will be interesting to see if the pound can sustain its momentum post-UK inflation data.
Commodities markets have been mixed, with notable reversals attempted across the board. Oil saw a successful rebound, holding firm this morning with hopes for a more sustained recovery. Metals, on the other hand, showed only partial reversals. Silver, for example, is giving up some of yesterday’s gains in early European trading, indicating lingering bearish pressure.
To summarize, while today’s economic data may be limited, NVIDIA’s post-market earnings release will be the key event. Yesterday’s brief safe haven rally, triggered by geopolitical concerns, has now faded, and the focus shifts to potential continued weakness in the Japanese yen and Swiss franc. For now, the spotlight remains on the U.S. markets’ resilience and whether they can sustain their gains, with European indices and commodities trying to catch up.