Metals Surge While Bitcoin Extends Its Decline

Hello traders, welcome to Wednesday as we move into the European session. Let’s take a look at what is driving markets right now, starting with the macro calendar.

Just a few minutes ago, we received inflation data from Europe. Inflation came in below expectations, but despite the softer print, the euro reaction has been muted. The single currency is actually trading higher on the day, suggesting that the data was already largely priced in or overshadowed by other factors. Still ahead on the calendar, we have US ADP non-farm employment change and ISM services PMI, both of which could inject volatility later in the session.

On the earnings front, yesterday after the market close we saw results from AMD. Earnings beat expectations, but the market reaction has been clearly negative, with pre-market trading indicating an opening around 7% lower. Today’s earnings calendar includes Eli Lilly, which will report before the market opens, and the biggest name of the day, Google, reporting after the market close. These releases will be key drivers for US equities later on.

Looking at the charts, equity indices are attempting to stabilize. Yesterday’s session was clearly negative, especially for US indices, but Wednesday is starting with a recovery attempt and a more constructive tone. For now, this looks like a corrective bounce rather than a confirmed trend reversal, but sentiment has improved compared to yesterday’s close.

On the currency market, the euro and the British pound are holding firm. The US dollar is also trading stronger today, while the weakest currency on the board is the Japanese yen, which remains under clear pressure. The New Zealand dollar is also notably weak. The reason here is fundamental. Overnight job data from New Zealand showed the unemployment rate rising from 5.3% to 5.4%, which weighed on the currency and reinforced the bearish bias.

Turning to commodities, oil is having another strong session. The move started yesterday after reports that the US shot down an Iranian drone flying close to a US aircraft carrier. This geopolitical development boosted oil prices, and that upside momentum is continuing today. Metals are also performing exceptionally well. Gold is up close to 3%, while silver is gaining nearly 7%. This represents a strong recovery after the heavy selling pressure seen at the end of last week, with gold already retracing almost half of that previous drop.

Finally, cryptocurrencies remain the weak spot across markets. Bitcoin continues to push significantly lower, extending its bearish move and confirming that sentiment in the crypto space remains negative despite the recovery seen in equities and commodities.

Overall, Wednesday is shaping up as a session of selective recovery. Indices and metals are finding buyers, currencies are driven by data divergence, while crypto continues to lag behind the rest of the market.

Source: https://www.axiory.com/analytics/market-news/metals-surge-while-bitcoin-extends-its-decline