Today is a big day in the market, with key US inflation data and policy meetings in Banks controlling the Euro and British Pound.
- There will be a release of crucial US CPI (inflation) data today, which in recent years has been the key driver of the Forex market. Any surprises will likely shift market expectations of the path of rate cuts in 2026, and this will likely move the US Dollar and US stock markets, as well as having an effect on commodities, and of course USD yields. The data is expected to show a tiny uptick on an annualised basis, from 3.0% to 3.1%.
- The Bank of England will be holding a policy meeting today. It currently has the highest interest rate of all the major currencies at 4.00%. The Bank is expected to cut rates by 0.25%, especially since UK CPI (inflation) data came in much lower than expected earlier this week. Any surprise will impact the GBP/USD currency pair and Pound crosses such as GBP/JPY and EUR/GBP.
- The European Central Bank will be holding a policy meeting today, but is expected to leave its interest rate unchanged at 2.15%.
- Stock markets are lower, and many analysts see this as a reaction to an AI-driven tech overvaluation. The S&P 500 Index has been showing topping price action lately and followed through yesterday with a drop to a new 3-week low price. It is still a bull market, but a deeper retracement is threatened.
- Precious metals remain in focus, with markets dominated by them as an asset class, interestingly with the other precious metals really overshadowing Gold:
- Silver continues to rise firmly, trading nearly as high as $67, which is a new all-time high. Silver has risen by almost one-third in value in less than four weeks! I have been long for a while.
- Platinum is also making an explosive move higher to a more than 10-year high price above $1,900. I entered a long trade earlier this week.
- Gold is rising, but its advance is relatively subdued.
- Palladium has made a strong rise over the past day or so to reach a new near 3-year high. I will be entering a long trade in Palladium later today. For traders who can't afford the position size available in the futures market, there are palladium ETFs available which are much more affordable, for example PALL.
- In the Forex market, since today's Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest has been the New Zealand Dollar. The USD/MXN currency pair is testing very long-term lows, having reached a new 17-month low recently. Many Forex brokers pay positive swap on short positions, which could make this an attractive carry trade on the short side. The USD/ZAR currency pair made a near 3-year low yesterday, and this can also be attractive to carry traders, although less so than USD/MXN as South Africa's interest rate is a bit lower.
- Bitcoin is showing price action which suggests indecision. Bears may need to break below $81,000 or even the round number below that at $80,000 to be more convinced of a stronger move down. The price is currently supported just above $85,000.
- There will be a release of US Unemployment Claims today.
- The Bank of Japan will be holding a policy meeting during tomorrow's Tokyo session. It is expected to hike its interest rate by 0.25% to 0.75%. If it passes on the hike, which is very unlikely, we can expect the Yen to make a sharp downwards price movement in line with its long-term bearish trend