Markets opened today in a more cautious mood following a strong start to the week. European indices are heading into the early part of the session near daily lows, reflecting a mild pullback. However, it’s worth noting that Monday delivered significant gains, so what we’re seeing now appears to be a healthy bearish correction rather than a full reversal.
From the macro perspective, today began with a closely watched interest rate decision from Australia. As expected, the Reserve Bank of Australia delivered a rate cut, lowering policy rates to a two-year low. This move was well telegraphed by markets, so while the Australian dollar weakened slightly, the reaction was relatively muted. The RBA’s dovish stance reflects waning inflation pressure, with inflation continuing on its downward path—providing the central bank room to ease.
On the currency front, the standout performer this morning is the Japanese yen, which is strengthening sharply. The yen’s surge is one of the key developments to watch today, potentially driven by safe-haven flows and technical breaks on key charts. Other currencies are showing less decisive movement, although the Australian dollar is weaker, as noted, and the Canadian dollar is holding steady ahead of its own inflation data.
Commodities are under pressure again today. After a rough Monday, precious metals like gold and silver continue to drift lower, failing to attract buyers even amid broad currency moves. Oil is also on the decline, posting small losses as traders wait for more concrete demand-side signals.
Still ahead today: Canadian CPI, with markets expecting a drop to -0.1% on the monthly figure—a decline from the previously expected 0.3%. This could set the tone for the Canadian dollar into the North American session and influence broader inflation expectations in North America.