This Wednesday promises to be the most significant day of the week for market watchers. High volatility is expected, especially for the US dollar, as crucial economic data is on the docket. Early in the European session, the UK will release its GDP figures, with expectations set at 0%. But the real action will come from across the Atlantic. The US will reveal its inflation data, anticipated to hold steady at 3.4% year-over-year. Later, the Federal Reserve will announce its interest rate decision. While no changes are expected, all eyes will be on the subsequent statement and press conference for any hints about future policy moves.
In the market, Tuesday saw most indices end in negative territory, but today's futures suggest a more optimistic start. Notably, the DAX hit a new low yesterday but managed a bounce, hinting at a potential upswing. On the currency front, yesterday's trading featured corrections in European emerging market currencies like the Hungarian forint, Czech crown, and Polish zloty. Strong performers included the New Zealand dollar, British pound, and Canadian dollar. This trend continues today, with the Australian, Canadian, New Zealand, and US dollars showing strength, while the Japanese yen is currently the weakest.
Commodities are also experiencing notable movements. Precious metals and oil are undergoing a bullish correction, exceeding initial expectations. Both gold and oil are poised to test key resistance levels today. Gold's resistance is around $2,320 per ounce, while oil faces a long-term downtrend line that has capped gains since early April. The release of US inflation data will likely have a significant impact on the dollar, which in turn will influence these commodities.
As we await the critical data releases, the market's response will be crucial in determining the week's overall trend. Stay tuned for updates and prepare for an eventful trading day.