US Inflation and Bank of Canada in Focus: Key Wednesday Drivers

Hello traders, welcome to Wednesday’s session. Today brings a busy calendar headlined by inflation data from the US, with expectations for a rise to 2.7% year-over-year, up from the previously reported 2.6%. Also in focus is the Bank of Canada, which is widely expected to implement a 50 basis point rate cut. These events make today critical for North American currencies and, by extension, the broader market.

Tuesday brought exciting news from Alphabet (Google), which announced its latest quantum computing chip, Willow. Touted as a breakthrough in quantum computing, the innovation ignited investor enthusiasm, propelling Alphabet’s stock up 6%. This development reaffirms Google’s reputation as a leader in cutting-edge technology and provides fresh optimism for its growth prospects.

On the indices front, we are witnessing a small bearish correction, but the long-term bullish sentiment remains intact. Yesterday’s rally in Alphabet further strengthened the tech sector’s outlook.

The forex market continues to experience high volatility, particularly in Antipodean currencies, which are swinging wildly in a rollercoaster pattern. Meanwhile, the Japanese Yen is attempting a recovery after two days of losses, and it will be worth watching if this pullback gains momentum throughout the day.

The commodities market saw strong upswings on metals earlier in the week, but gold and silver are now undergoing minor corrections. Similarly, oil posted gains and continues to move positively, mirroring the general trend in commodities. Interestingly, these moves cannot be attributed to a weaker dollar, as the American dollar strengthened over the past two days. This divergence indicates broader support for commodities unrelated to currency fluctuations.

Today’s US inflation report is expected to be a game changer, as it often sets the tone for market sentiment. The outcome could drive sharp moves across the board, particularly for the dollar, commodities, and indices. Keep an eye on Bank of Canada’s rate decision, which will heavily influence the Canadian dollar and potentially spill over into broader risk sentiment.

Source:https://www.axiory.com/analytics/market-news/us-inflation-and-bank-of-canada-in-focus-key-wedne