A new week in trading starts with eyes firmly set on Wednesday, a day expected to shape market sentiment with critical US inflation data and the Federal Reserve's interest rate decision. The market may experience lower activity until these key updates are revealed. Anticipation is also building around the earnings reports from major tech firms such as Oracle on Tuesday, Broadcom on Wednesday, and Adobe on Thursday, which will provide valuable insights into the tech sector's health and influence broader market trends.
Indices are beginning the week near long-term highs, reflecting cautious optimism among investors. However, the commodities market is showing significant volatility. Oil, having reached the peak of a bullish correction, faces uncertainty about sustaining its momentum or reverting to its bearish trend. Meanwhile, precious metals like gold are signaling further declines with a bearish head and shoulders formation.
Currency markets present a mixed picture. The euro has weakened, possibly due to the recent European elections and last week's interest rate decision. In contrast, antipodean currencies, including the Australian and New Zealand dollars, are showing strength. The British pound and the US dollar are also gaining ground. This divergence highlights the varied economic conditions and investor sentiments across different regions. Overall, while the week begins quietly, the upcoming economic data and earnings reports are expected to bring significant movements and opportunities for traders, influencing the market's direction in the coming days.