Good morning and welcome to one of the most eventful Wednesdays of the summer. Today's calendar is brimming with key economic data. We've already seen inflation figures from Australia, expectations at 3.8%. Despite this, the Australian dollar has weakened significantly, making it the weakest currency so far. Japan's surprise interest rate hike, despite being hinted at beforehand, has led to a stronger yen, although there's been a slight pullback as the European session starts.
On the earnings front, Tuesday saw some major movements. Microsoft posted better-than-expected earnings, but its stock dropped nearly 3% in after-hours trading. Merck also reported strong earnings, yet its stock fell 10% during the session. Conversely, AMD's impressive earnings sent its stock up almost 8% after hours. Today, the focus will be on Meta Platforms, Mastercard, T-Mobile, and Qualcomm, all reporting after the market close, which will undoubtedly capture traders' attention.
The macroeconomic calendar today is equally packed. We are anticipating the Eurozone's CPI flash estimate, expected at 2.5%, and Canada's GDP at 0.1%. In the US, pending home sales will be released, culminating in the Federal Reserve's interest rate decision, statement, and press conference. No changes in rates are expected, but all eyes will be on the Fed's outlook and guidance, which could drive significant market movements.
In the markets, indices are recovering, continuing the rebound from yesterday's sharp decline and subsequent recovery. Commodities are showing mixed signals; oil is attempting to rebound after hitting new long-term lows, while precious metals like gold and silver are gaining strength, with gold particularly having a strong session yesterday. Currencies are also showing significant movements, with the yen gaining strength, while commodity currencies like the Australian dollar, New Zealand dollar, and Canadian dollar show signs of recovery after a prolonged period of weakness.