Hello traders, and welcome to Wednesday’s session. The spotlight today is firmly on one key event: inflation data from the United States. Markets are bracing for the release, with expectations set at 0.2% month-over-month and a slight rise to 2.5% year-over-year. This figure will be critical for shaping expectations around future Fed policy moves, especially with recent mixed signals on the strength of the U.S. economy.
Alongside the data, traders are also watching the ongoing U.S.-China trade talks. While negotiations continue behind closed doors, there haven’t been any market-moving headlines or leaks—yet. But as always, any surprise development here could rapidly shift sentiment.
On the equity front, indices are showing weakness this morning. After a mixed performance on Tuesday—a successful session in the U.S. but a negative one in Europe—both European and American benchmarks are pointing to a softer open today. The divergence between regions remains visible, but risk appetite across the board appears to be cooling.
In the currency market, the dominant theme is the weakness of antipodean currencies. Both the Australian dollar and New Zealand dollar are significantly under pressure as the session gets underway, reflecting a broader pullback in risk sentiment.
Turning to commodities, oil extended its rally early on Tuesday but reversed sharply by the close, raising doubts about whether the recent upswing can hold. Meanwhile, gold continues to drift sideways, holding a tight range since the start of the week. In contrast, platinum and palladium have surged, showing notable strength and outperforming gold significantly so far.
All eyes now turn to the U.S. CPI data. With inflation being one of the most closely watched metrics in global macro, today’s release will likely set the tone for the remainder of the week.