"European markets have kicked off on a negative fitting in a day that looks jampacked full of potential obstacles that will leave many be believing they are best served sitting it out for now. In a week that has seen a new front runner for the fed chair position, today's FOMC interest rate decision provides the basis for market rate expectations in the months ahead."
"Meanwhile, earnings from Mag7 giants Microsoft, Meta, and Tesla bring a degree of caution around the prospective volatility that could come our way in the event of any earnings weakness after the close. Nonetheless, the relative underperformance of big tech names over the past two-months does provide a more optimistic tone, with many believing that today's earning reports will bring about a fresh push higher for the tech sector."
"Australian inflation data brought fresh AUD volatility overnight, with AUD gaining ground after a worrying 1% inflation reading for the month of December. That took to annual figure up to the joint highest figure since June 2024. With AUDUSD breaking up to the highest level in almost three-years, there is a perception that the RBA are going to take a more restrictive approach going forward."
European markets opened lower as investors faced multiple obstacles including a key FOMC interest rate decision and major US tech earnings that could spark post-close volatility. The Fed decision will set market rate expectations after a week that produced a new front-runner for Fed chair, with BlackRock's Rieder emerging as a leading candidate and traders probing his monetary policy views. Australian inflation surprised with a 1% monthly print, lifting the annual rate to a joint high since June 2024 and sending AUDUSD to nearly three-year highs amid rising odds of an RBA rate hike. Rieder favors lower rates to reduce housing costs and disinflation.
Read at London Business News | Londonlovesbusiness.com
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