➡️ Markets are currently dominated by anticipation of tomorrow's US Federal Reserve meeting, where it is widely expected to begin a process of interest rate cuts for the first time in 4 years. Yesterday, sentiment shifted in favor of a 0.50% cut, with 67% expecting this versus 33% expecting a 0.25% cut, according to the CME FedWatch tool. This has pushed the US dollar lower and some other currencies and assets higher, most notably gold and the Japanese yen, which again hit new long-term highs yesterday. However, the last few hours are seeing the dollar gain a bit while gold and the yen have fallen. It is very likely that we will see a consolidation today in most markets ahead of the Fed statement tomorrow.
➡️ Gold It looks bullish in the long and medium term and continues to trade near the all-time high reached yesterday, just below 2,600 $. Gold is trading in clear skies and could continue to move higher. Trend traders will be interested in being long on gold.
➡️ The Japanese yen continued to strengthen yesterday as a currency with monetary policy diverging from the dovish moves to cut rates that are being seen almost everywhere. The USD/JPY currency pair traded at a fresh 1-year low near ¥139.50 yesterday, but has recovered somewhat in the past few hours. Trend traders will be interested in being long on the yen.
➡️ In the Forex market, the British pound was the strongest major currency today, while the New Zealand dollar was the weakest. However, the numbers are so small as to be effectively meaningless, and it seems likely that the big moves in the coming days will likely be in the Japanese Yen and the US Dollar.
➡️ The 2-year US Treasury yield looks bearish as the US dollar falls, trading at a new 2-year low yesterday. Trend traders will be interested in shorting here if they can access this asset (micro futures contracts are available on the CME).
➡️ Today, US retail sales data and Canadian consumer price index (inflation) data will be released. The Canadian Consumer Price Index is expected to show neither an increase nor a decrease in the past month.
Credit by DailyForex.com