Welcome to Wednesday. The headline event today is earnings from Nvidia, scheduled after the market close. This is clearly the key catalyst of the session. Given Nvidia’s weight in major indices and its influence on the AI narrative, volatility around the close and into tomorrow’s session is very likely.
Earlier today, we received inflation data from Australia. CPI came in higher than expected, which immediately supported the Australian dollar. The New Zealand dollar is also benefiting, though to a slightly lesser extent. The stronger inflation print reduces pressure on the Reserve Bank of Australia to ease policy aggressively, which is positive for the currency.
Still ahead, markets will also focus on remarks from Donald Trump. Traders will be listening carefully for any new signals regarding tariffs and developments in the ongoing tensions with Iran. Headlines in this area have been driving sentiment repeatedly in recent weeks.
From Japan, Deputy Chief Cabinet Secretary Ozaki commented that the specifics of monetary policy will remain in the hands of the Bank of Japan. The statement triggered mild weakness in the Japanese yen, with yen crosses moving higher in response.
On the FX board, the strongest currencies are clearly the antipodeans, led by the Australian dollar. The yen is weaker, and European currencies are also showing relative strength. The overall tone suggests a mild risk-on bias in currency markets.
Equities rebounded yesterday. We saw a relief rally in software and SaaS names following comments from Anthropic regarding its AI cloud model. Previously, their announcements had pressured the sector, as investors feared displacement risk. This time, however, the messaging shifted toward cooperation with companies rather than replacement. That narrative helped lift sentiment across tech.
In commodities, momentum is positive. Metals are pushing higher, oil is also climbing, and the broader complex is firm. This aligns with the constructive tone seen in equities and FX. For now, the market appears to be returning to the base scenario that has dominated much of the past few months, with risk assets stabilizing and commodities regaining strength.
All eyes, however, remain on Nvidia. Today’s close could define the direction for tech and broader indices into the end of the week.