Wednesday Focus: U.S. Inflation to Drive Market Momentum

Hello traders, and welcome to Wednesday. Today the spotlight falls on inflation — not consumer inflation, but producer price data from the U.S. While this report typically carries less weight, in the absence of other major releases it will be enough to drive momentum across the board: currencies, indices, and commodities will all be looking for direction from this number.

Markets are already showing their hand. American indices are climbing strongly, pushing higher and extending their recent bullish streak, while their European counterparts are struggling to keep pace. The divergence between U.S. and European equities remains notable, with Wall Street holding the upper hand.

On the commodities front, oil is attempting a rebound, looking to recover from recent losses, while gold and silver are regaining ground after Tuesday’s correction. Metals overall are trading higher, supported by a softer dollar backdrop and improved sentiment.

In currencies, the Australian and New Zealand dollars surged overnight, showing significant strength in the Asian session. The Japanese yen, meanwhile, is on the back foot, continuing its weakness into Wednesday morning. Traders are also keeping a close eye on cryptocurrencies: after Tuesday’s sharp drop in Bitcoin, Ripple, and Ethereum, Wednesday opens with a cautious reversal attempt, hinting at a possible rebound.

All eyes now turn to the upcoming U.S. inflation release, which will set the tone for the rest of the week. Whether the dollar strengthens further or finally gives way will depend on how this number lands.

Source: https://www.axiory.com/analytics/market-news/wednesday-focus-u-s-inflation-to-drive-market-mome