Let’s start today’s market commentary with the macro calendar. Yesterday we received higher-than-expected inflation data from the eurozone, but the release did not provide much support for the euro. The common currency remains under visible pressure despite the stronger inflation print.
Today’s calendar includes several notable data points. Earlier we received GDP data from Australia, which came slightly above expectations. Later in the day the market will focus on US ADP employment change as well as ISM services PMI.
However, macro data is clearly not the main driver right now. The entire market’s attention remains focused on the situation in the Middle East, where the conflict involving Iran and the United States shows no signs of ending quickly. What initially looked like a short and contained operation now appears to be turning into a broader and potentially longer conflict.
Looking at market performance, yesterday’s session brought an interesting shift. During the Asian session and the first half of the European session, indices were under strong pressure. Later in the day, however, we saw a noticeable rebound that helped stabilize sentiment temporarily.
The Asian session today again opened with declines. We will now see whether the European and later the US sessions bring another attempt at recovery. One market worth highlighting is KOSPI, which dropped around 12%, marking one of the worst sessions in decades. That move shows how fragile global sentiment currently is.
Overall, equities remain under pressure, although markets are trying to form a short-term rebound.
In the currency market, the Australian dollar is declining despite the stronger-than-expected GDP data. That divergence suggests that macro fundamentals are currently less important than global risk sentiment. At the same time, classic safe-haven currencies are gaining. The Japanese yen and Swiss franc are moving higher, confirming that Wednesday’s Asian session is again characterized by risk aversion and capital flowing into defensive assets.
Commodities are showing mixed behavior. Gold and silver are attempting a rebound after several days of heavy losses. Oil prices have stabilized near local highs. Despite a sharp sell-off yesterday during the second half of the session, when crude dropped as much as 8%, prices managed to hold near the upper part of the recent range.
What stands out across all markets right now is volatility. Moves of 5–7% in commodities or 1–2% swings in equity indices have become common during recent sessions. Markets are clearly unsettled, and in such an environment traders need to remain particularly cautious.