Hello traders, and welcome to Thursday. After a highly anticipated Federal Reserve meeting on Wednesday, markets are absorbing the outcome and pushing into Thursday with a clear sense of direction.
The Federal Reserve left rates unchanged at 4.5%, as expected. During the press conference, Jerome Powell struck a cautious yet informative tone. Among his key statements, Powell acknowledged that large increases in tariffs, as recently announced, could lead to higher inflation and lower employment if sustained. He emphasized that the Fed is well positioned to wait for greater clarity, as the long-term impact of tariffs on inflation remains uncertain. Powell reinforced the importance of price stability, stating that without it, strong labor market conditions cannot be maintained.
Following the press conference, equity indices rallied. The upswing that began late Wednesday is continuing into Thursday’s early European session. The American dollar also strengthened, reacting positively to the Fed’s balanced messaging. This upward momentum in the dollar is extending today, making the USD the strongest major currency at the moment.
The calendar for Thursday remains busy. Markets are eyeing the Bank of England's interest rate decision, where a 25 basis point cut to 4.25% is widely expected. Later in the day, the U.S. will release unemployment claims, adding further weight to today's session.
On the earnings front, Wednesday brought a mixed batch of high-profile reports. Novo Nordisk and Walt Disney both beat expectations, with Disney surging 10% by the close. Meanwhile, Uber posted a higher-than-expected EPS but lower revenue, which led to a 2.5% drop during the session. Looking ahead to today, Toyota Motor stands out among the few reporting, but overall, the earnings calendar is quieter heading into Friday.
In the currency market, aside from the dollar’s dominance, we’re seeing strength in the Australian and New Zealand dollars, as well as a recovery in the British pound ahead of the BOE decision.
Turning to commodities, gold and silver remain under pressure. Yesterday, gold saw a volatile swing — a strong spike followed by a sharp drop — and the correction appears to be ongoing. On the other hand, oil is holding steady, continuing its gradual push to the upside, supported by a more stable risk environment.
After yesterday’s volatile swings, markets seem to be normalizing. The start of the European session is calm, and traders appear to be regaining focus after digesting Powell’s comments and the Fed's decision.