Hello traders, and welcome to Tuesday. As we approach the start of the European session, the markets are already showing some intriguing developments across currencies, indices, and commodities.
On the currency market, the spotlight remains on the Japanese yen, which continues its strong rally from Monday. This move stems directly from the increasingly hawkish tone out of the Bank of Japan, and traders are reacting by buying yen aggressively. The Australian dollar is also enjoying a solid bid. While the Reserve Bank of Australia left interest rates unchanged at 3.6%, the real driver came from the statement and press conference, where the central bank signaled a hawkish tilt. That tone provided the Aussie with a strong push, and as is often the case, the New Zealand dollar is following suit. In contrast, North American currencies are on the back foot — both the U.S. dollar and Canadian dollar are weaker, while European currencies are displaying broad-based strength.
Turning to indices, yesterday was a volatile ride. We first saw a powerful upswing, followed by a sharp correction, leaving markets searching for direction. This morning, futures are trading flat, as traders pause to assess the next big catalyst. The sideways opening suggests investors are waiting for confirmation before committing to a clearer trend.
On commodities, the picture remains split. Metals are extending their bullish run, continuing to climb higher in what looks like a very promising mid-term trend. On the flip side, oil is still under pressure. After yesterday’s sharp drop, today’s early trading is subdued, with crude moving sideways into the European session — a pause that may set the stage for the next decisive move.
Looking ahead, the calendar remains packed. We’re waiting for the German prelim CPI, a speech from ECB President Christine Lagarde, and from across the Atlantic, the JOLTS job openings and CB Consumer Confidence from the U.S., with expectations at 96. These events are likely to inject fresh volatility into today’s trading, and traders should brace for another active session.