Hello traders, and welcome to Wednesday! The main event on the calendar today is the FOMC meeting minutes, which will be released at the end of the American session. These minutes will be closely watched for any insights into the Federal Reserve’s future policy direction.
Yesterday, we had inflation data from Canada, where the CPI met expectations, but both the median and trimmed CPI figures came in lower than anticipated. This led to a clear reaction in the markets, with the Canadian dollar becoming one of the weakest currencies. The American dollar also struggled, making it the weakest currency of the day, while the Japanese yen emerged as the strongest.
Today, however, the situation has flipped. The Canadian dollar and American dollar are now the strongest currencies, while the Japanese yen has fallen to the bottom of the pack. This reversal highlights the lack of clear directional movement in the currency markets, with prices moving sideways for the most part.
Turning to the futures market, yesterday’s session saw a bearish correction, but today, futures are climbing higher once again. This suggests that yesterday’s dip was merely a correction rather than a full-blown trend reversal, disappointing those who were hoping for a more sustained downturn. The bullish momentum seems to be back in play.
As for commodities, we’re seeing a decline across the board. Precious metals like silver and gold are both dropping, and the same goes for oil. Interestingly, while these assets don’t always move together, their paths have aligned over the past two days, with both energy and metals heading lower.
That’s the state of the markets this Wednesday. All eyes will be on the FOMC meeting minutes later today, which could set the tone for the remainder of the week. Let’s see what insights they bring!