Welcome on this bustling Thursday, following a highly eventful Wednesday. Let’s dive into the key happenings. Yesterday, the Japanese central bank’s decision to hike interest rates, which had been speculated upon, solidified the yen’s strength. Eurozone inflation figures surpassed expectations at 2.6%, while Canada’s GDP also beat forecasts at 0.2%. The U.S. reported robust pending home sales at 4.8%, and the Federal Reserve’s rate decision, accompanied by a statement and press conference, pushed indices like the S&P 500 and NASDAQ higher, breaking critical resistances and forming bullish patterns, indicating a solid buy signal.
In the currency arena, the USD was notably weak, while the JPY surged following the rate hike. This trend persists today, with the yen, Swiss franc, and American dollar showing strength. Despite the Fed’s announcements aiding indices, their effect on the USD was subdued. Commodities had a strong performance, with oil and precious metals climbing. Oil’s rebound came after hitting new midterm lows, while precious metals like gold and silver enjoyed positive sessions, signaling a favorable outlook for commodities.
Today’s agenda includes a pivotal interest rate decision from the UK, anticipated to result in a 25 basis point cut. Additionally, the ISM Manufacturing PMI from the U.S. is forecasted at 48.8. Earnings season remains intense, with Meta Platforms posting better-than-expected results, leading to a 7% rise in after-hours trading. Mastercard also exceeded expectations, gaining 4%. Today, we await earnings from heavyweights Apple and Amazon, which are set to report after the market close, ensuring a busy day for stock traders.
Currently, the market sentiment is exceedingly positive for indices, with traders closely watching the JPY pairs. These pairs are attempting to reverse some recent gains, particularly USD/JPY, which is rebounding off a long-term uptrend line connecting lows since early 2023. This setup suggests a potential bounce for USD/JPY, while overall, the market continues to ride the wave of yesterday's bullish trends.