Hello traders, welcome to what is arguably the most important day not only of this week, but potentially of the entire month. Wednesday brings an exceptionally busy calendar, with multiple market-moving events stacked on top of each other, setting the stage for elevated volatility across asset classes.
We already started the day with inflation data from Australia. Inflation came in higher than expected, which initially triggered a strengthening of the Australian dollar. Part of those gains has since been given back, but the reaction confirms that inflation pressures remain relevant and that the Australian dollar remains sensitive to macro surprises.
The main focus, however, lies ahead. Today we will see interest rate decisions from two central banks. First comes Canada, where no change in rates is expected. The real centerpiece of the day is the US Federal Reserve. The Fed is expected to keep interest rates unchanged at 3.75%, but the decision itself is only part of the story. The accompanying FOMC statement and, most importantly, the FOMC press conference will be closely analyzed for any shift in tone, guidance, or balance-of-risk assessment.
As if that were not enough, the day continues with a major earnings block after the US market close. Results from Microsoft, Meta Platforms, and Tesla will be released just a few hours after the Fed decision. This combination of central bank risk and mega-cap earnings makes today uniquely heavy and potentially explosive for markets.
Adding to the uncertainty were comments from Donald Trump. Trump stated that he would announce a new Fed chair soon and suggested that interest rates would come down once the new chair takes office. He also commented on the US dollar, saying he is not concerned about its decline and that he can have it “up or down like a yo-yo.” These remarks weighed heavily on the dollar yesterday and triggered a notable sell-off in the greenback.
Today, we are seeing a partial recovery in the US dollar, which is currently the strongest currency on the board. However, this move should be seen mainly as a corrective rebound after several days of weakness rather than the start of a new bullish trend. At the same time, the New Zealand dollar and the Swiss franc are under pressure, alongside several European currencies.
Equity indices are trading higher, with strength concentrated primarily in the US. The S&P 500 and Nasdaq are pushing significantly higher, while European indices are lagging, with the DAX underperforming relative to its US counterparts.
In commodities, oil is moving higher, supported by improved sentiment and positioning ahead of the Fed. Precious metals remain the standout performers. Gold continues its exceptional run and is printing new all-time highs as we speak. Silver is also pushing higher and has almost completely erased the sharp drop seen at the end of Monday’s session. The recovery brings silver back toward its recent highs, while gold leads the complex into fresh record territory.
Overall, the trend in metals remains firmly intact. With the Fed decision, press conference, and major earnings still ahead, today has all the ingredients to define market direction not just for the rest of the week, but potentially for the weeks to come.