Hello traders, welcome on Wednesday.
Yesterday was PMI day, and the results painted a familiar picture. In the U.S., PMI numbers came broadly in line with expectations — no real surprises there. But across Europe and the UK, manufacturing readings once again disappointed, coming in largely below expectations, underlining the weakness of the sector on this side of the Atlantic.
The other big story came in the evening with Jerome Powell’s speech. The Fed Chair signaled a more cautious approach to future rate cuts, a tone noticeably different from several other Fed officials who had been pushing for more urgency. Markets took this as a supportive sign for the dollar, and indeed, we saw the American dollar strengthen in the aftermath of Powell’s comments.
Today, Wednesday, already brought us inflation data from Australia — slightly hotter than expected at 3% versus 2.9%. That gave the Australian dollar a significant boost, making it one of the strongest currencies on the board right now. We’re still waiting for Germany’s IFO Business Climate, expected at 89.3, but otherwise, the calendar looks light compared to yesterday’s PMI fireworks.
Looking at markets, commodities remain in their bullish phase: oil continues climbing and metals are also pushing higher with gold and silver keeping momentum intact. Indices had a correction day yesterday, but overnight trading in Asia brought a strong rebound, and futures are setting up for a positive start to the European session. The question is whether this recovery will hold into the later hours of trading. Cryptocurrencies, meanwhile, saw a sharp dip during the Asian session but are already recovering — a quick move that may open the door for a potential bullish setup in the near term.
So that’s where we stand on Wednesday morning: stronger dollar, stronger Aussie, commodities still on the rise, and indices trying to shake off Tuesday’s correction.