The USD holds steady, oil prices rebound, equity markets are mixed, and US yields rise ahead of the Fed interest rate decision. The U.S. dollar steadies just below one-month highs as investors await today's Federal Reserve policy decision, with markets pricing roughly a one-in-three chance of a surprise rate hike. Renewed Middle East tensions have lifted oil prices and supported the greenback, while investors remain focused on Chair Kevin Warsh's comments for guidance on the outlook for U.S. interest rates. Global equities are mixed as investors await today's Federal Reserve decision and earnings from AI heavyweights Microsoft and Meta, with markets looking for fresh guidance on the outlook for interest rates and technology spending. U.S. futures are modestly higher as the recent semiconductor selloff stabilizes, while renewed Middle East tensions have pushed oil prices higher but done little to dampen overall market sentiment. Elsewhere, oil prices rally on renewed Middle East tensions, while gold slips as higher energy prices reinforce expectations of tighter U.S. monetary policy. Bitcoin strengthens on improving risk appetite ahead of today's Federal Reserve decision. In focus today: Markets will be watching the Federal Reserve's interest rate decision, Fed Chair Kevin Warsh's press conference and the Bank of Canada's Summary of Deliberations, with the events expected to provide fresh direction for currency markets.
News Headlines. US and Saudi Arabia strike Iran-backed militias as fighting reignites. China's commercial space boom poses strategic challenge for theUS. European wildfires expose shortage of Canadair water-bomber planes. Ukraine adapts strikes on Russian energy industry to hit critical components. Chip stocks tumble as AI sell-off deepens. US says it intercepted 'surprise' Iranian missile attack. UBS and Deutsche bank join Wall St. rivals in trading-led profit surge. Takaichi warns of 'race against time' to rescue Japan earthquake survivors. Canada's worst wildfire season fuel push for national emergency agency.
In currency markets. Against the USD, G10 currencies are little changed as investors await today's Federal Reserve policy decision, with most major pairs holding narrow ranges ahead of the outcome. The Australian dollar is the clear under-performer after weaker-than-expected inflation data prompted markets to sharply scale back expectations of another Reserve Bank of Australia rate hike.
In commodity markets. WTI +4.40% | Nat Gas -0.49% | Gold -0.19% | Silver +0.43% | Copper -0.68% | Palladium -1.23% | Coffee -0.96% | Cocoa +0.23% | Soybeans -1.13% | Wheat -0.57%
CAD holds steady heading into today's Federal Reserve policy decision, with the loonie finding support from firmer oil prices as renewed Middle East tensions lift crude and improve the outlook for Canada's commodity-linked currency. Investors will also monitor the Bank of Canada's Summary of Deliberations for further insight into policymakers' views on growth and inflation, before attention shifts to Friday's Canadian GDP report.
EURCAD holds steady, straddling the 1.6050 level as the euro's relatively hawkish policy outlook is balanced by renewed support for the Canadian dollar from firmer oil prices. Investors are awaiting today's Federal Reserve decision, with the Bank of Canada's Summary of Deliberations and Friday's Canadian GDP report expected to provide the next direction for the cross.
EUR stalls below the 1.1400 level as investors await today's Federal Reserve policy decision, with the single currency supported by expectations that the European Central Bank will maintain a relatively hawkish policy stance. Attention will also turn to Eurozone inflation and GDP data later this week for further clues on the ECB's interest-rate outlook.
GBPEUR stalls below the 1.1700 level as investors remain cautious ahead of Thursday's Bank of England policy decision, with expectations that interest rates will remain unchanged. Markets will be closely watching Governor Bailey's comments for guidance on the timing of future rate moves, while concerns over the UK's fiscal outlook continue to weigh on sterling.
GBP holds steady around the 1.3300 level as the U.S. dollar eases ahead of today's Federal Reserve policy decision, although gains remain capped by renewed Middle East tensions and higher oil prices. Investors are also focused on Thursday's Bank of England meeting, with Governor Bailey's comments expected to provide fresh guidance on the outlook for UK interest rates.
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