Markets Reverse Course – Will the Momentum Continue?

Yesterday was a significant day in financial markets, marked by strong reversals across multiple asset classes. Indices saw a notable turnaround, climbing higher after recent struggles, signaling renewed buying interest. The Japanese Yen also experienced a shift, with Yen pairs rising as the currency weakened. Meanwhile, cryptocurrencies followed suit, with some, including Ethereum, staging rebounds.

As we transition into Wednesday, market sentiment remains mixed. Futures are showing both gains and losses across different sectors, but European markets are set to start the session on a positive note, reflecting early optimism. In the foreign exchange market, European currencies are gaining strength at the opening of the European session. However, commodity-linked currencies such as the Canadian Dollar, Australian Dollar, and Norwegian Krone are struggling. The weakness in Norway’s Krone is particularly noteworthy, considering the country’s role as a major oil producer. With oil prices continuing to decline, it’s likely that this underperformance is closely tied to the ongoing struggles in the energy market.

Oil remains under pressure after hitting new long-term lows yesterday. Although there was an attempt at a V-shaped recovery, it remains uncertain whether this rebound will hold or fade. On the other hand, precious metals are showing resilience. Gold and silver have started Wednesday’s European session on the green side of the market, benefiting from a flight to safety amid lingering economic uncertainties.

The day ahead is packed with important economic data releases that could influence market direction. Australia’s GDP figures were released earlier, coming in as expected at 0.6%, providing no major surprises. Investors are now awaiting inflation data from Switzerland, forecasted at 0.5%, which could impact the Swiss Franc’s movement. Later in the day, attention will turn to the US, where ADP Non-Farm Employment Change figures will provide insight into the labor market ahead of Friday’s key jobs report. Additionally, the US ISM Services PMI, expected at 52.5, will be closely watched as a gauge of economic activity in the services sector.

Source: https://www.axiory.com/analytics/market-news/markets-reverse-course-will-the-momentum-continue