Hello traders, and welcome to Wednesday! Today, all eyes are on the upcoming inflation number from the US, making it the main focus for the market. The CPI is expected to drop to 2.5% from 2.9%, and traders are eagerly waiting to see if this will be the final figure. A lower-than-expected reading could have a significant impact, particularly on the US Dollar, which is already one of the weakest currencies this week.
Earlier this morning, we received GDP data from the UK, which came in lower than expected at 0% compared to the forecast of 0.2%. Unsurprisingly, this has weighed heavily on the British Pound, making it one of the weakest performers in the currency market today. Meanwhile, the American Dollar continues to struggle as well, while the Japanese Yen show strength.
In the commodities market, we are seeing notable developments in gold. Gold is currently testing a key horizontal resistance level around $2,530, which was the high reached in August. The outcome of this test will be crucial in determining the next direction for gold prices. Meanwhile, oil is experiencing a reversal today with a significant bounce, although the long-term sentiment remains negative for crude.
As for indices, the mood is cautiously optimistic. European indices are flashing green, attempting a recovery, while American futures are still slightly negative. However, the broader trend has been positive in recent days, with V-shaped reversals seen on American indices over the weekend. Friday and Monday's trading sessions were strong for stocks, so today’s inflation data could either reinforce or challenge that momentum.