Good morning traders, and welcome to Friday. As the European session begins, markets are digesting Thursday’s key events, including central bank rate decisions, U.S. economic data, and major corporate earnings reports. Today's focus remains on further macroeconomic releases and ongoing reactions to the developments from yesterday.
Thursday saw a significant move from the European Central Bank (ECB), which cut rates by 25 basis points as expected. During the press conference, Christine Lagarde emphasized that the Eurozone economy is expected to remain weak in the near term. Despite these concerns, the ECB maintains confidence that inflation will reach its 2025 target. Lagarde noted that the decision was unanimous and that inflation risks stem from wages, profits, and ongoing geopolitical tensions. However, she was hesitant to provide clarity on when the ECB might end rate cuts or fully assess trade risks by March.
The euro experienced volatility following the announcement. It initially strengthened but later reversed those gains, leading to euro weakness by the end of the day.
On the other side of the Atlantic, U.S. advanced GDP came in at 2.3%, lower than the forecasted 2.7%, further pressuring the American dollar. This data reinforced concerns about slowing growth, though markets showed resilience in the face of this disappointment.
In the currency market today, the Canadian dollar has recovered strongly, shaking off Thursday’s volatility that stemmed from tariff-related remarks by Donald Trump. During the Asian and early European sessions, the loonie regained its footing, strengthening alongside the Australian dollar and New Zealand dollar, which are currently among the strongest currencies. Meanwhile, the Japanese yen is under pressure and is the weakest performer so far today.
In the commodities market, oil and metals are maintaining positive sentiment, with modest gains recorded overnight. This continues the broader trend of strength in precious metals like gold and silver, which have benefited from recent market uncertainty. Oil, however, remains under scrutiny after a volatile week of declines and attempted recoveries.
Earnings season continues to drive market sentiment. Yesterday, Apple reported mixed results after market close, with EPS beating expectations but revenue coming in lower. Despite this, after-hours trading indicates that Apple is set to open 3% higher today. Visa and MasterCard also posted better-than-expected earnings, with both stocks seeing strong gains. Today, traders are looking forward to ExxonMobil’s earnings release, which is scheduled before the U.S. market opens.
On the indices, American markets are still trying to recover from Monday’s tech-driven drop, while European indices continue their impressive climb toward long-term highs. Positive sentiment prevails in Europe, with indices trading strongly in the green despite mixed data and global economic concerns.
As we move through Friday, traders will closely monitor key releases, including German CPI, Canadian GDP, and the U.S. Core PCE Price Index, all of which could influence market sentiment before the weekend.