The US Federal Reserve will be holding a policy meeting today, which will be closely watched for clues about the pace of rate cuts in 2026.
- Markets are eagerly awaiting the US Federal Reserve's policy meeting today, which is seen as having an 89% chance of ending with a rate cut of 0.25%. If the Fed either deepens or passes on this rate cut, it will have a dramatic effect on the US stock market and probably also the US Dollar. The deeper concern is the prospect of rate cuts in 2026, with markets fretting that the Fed won't cut by enough to keep the stock market afloat, so the Statement and Projections will be very closely scrutinised.
- The Bank of Canada is holding a policy meeting today, and is widely expected to hold rates unchanged.
- Precious metals continue to look bullish, led upwards by Silver, which has risen very strongly to hit a new all-time high in recent hours just shy of $61.50. Trend and momentum traders will want to be long of Silver and might be thinking about getting long of Gold too, although this is still some way off its recent record high price.
- In the Forex market, since the Tokyo open, it has been quiet, although yesterday was a busy day with the commodity currencies gaining very firmly against a weak Japanese Yen, which brought a threat of intervention from the Japanese government in their usual language warning about "excessive price movements". The USD/MXN currency pair is testing very long-term lows. Many Forex brokers pay positive swap on short positions, which could make this an attractive carry trade. Many trend traders will still be long of the USD/JPY currency pair, which got a bullish bounce this week after printing a large engulfing candlestick - the price is now close to ¥157.00 and I am still long here.
- Stock markets are generally subdued ahead of the Federal Reserve's policy meeting today. The data release will probably be the trigger for volatility in that market.
- Today there will two high impact economic data releases, in addition to the two central bank meetings which I mentioned above:
- US Employment Cost Index
- Australian Unemployment Rate