Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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We are only two days away from a long-awaited interest rate cut on the Dollar. FedWatch is currently leaning sharply towards a 25-bps cut and any larger cuts appear to be off the table for the time being. Despite the slight uptick in inflation observed over the past few months, the deteriorating labour market has left the Fed with no other option than to slash rates in a bid to stimulate job creation. US stocks were a mixed bag on Friday; the Dow suffered modest losses while the S&P 500 closed flat and the tech-heavy Nasdaq Composite managed yet another record high close. The hype surrounding artificial intelligence is still alive and well and continues to push tech stocks higher, as evidenced by last week’s surprise deal between OpenAI and Oracle (ORCL). The deal is valued at an eye-watering $300 billion and sent the stock flying 36% on Wednesday.
Positive sentiment further enveloped Wall Street last week as no fewer than six companies went public, each one raising over $100 million. Among them was Gemini Space Station (GEMI), the parent company of the Gemini crypto exchange, which raised $425 million in its IPO. Such listings are set to pick up over the next few months, with analysts projecting three to five IPOs per week throughout autumn.
Gold continued to stabilise over $3,600 an ounce this morning as attentions increasingly shift towards silver. The lesser metal has gained a commendable 45% since the start of the year and is now getting comfortable above $42. In crypto meanwhile, Bitcoin closed the week at $115k per coin after a painfully lacklustre weekend session; very little to be said about the alt market either. Currencies have been equally quiet in recent sessions, even in the typically more volatile pairs as the DXY remains stuck below the 98 mark. Everyone is waiting for Wednesday’s decision.
By most accounts, the outcome of the FOMC meeting late on Wednesday is a foregone conclusion. Despite this, the event remains by far the most important of the week and traders would do well to keep an eye on it anyway because however unlikely, a 50-bps cut is still possible. The Federal Reserve is not the only central bank with a decision to make this week. Prior to the Fed’s decision, the Bank of Canada will convene to vote on the Canadian Dollar, which is predicted to undergo a rate cut of its own from 2.75% down to 2.5%. On Thursday, the Bank of England will likely maintain rates on the Pound at 4% while on Friday, the Bank of Japan is expected to keep rates on the Yen at 0.5%. Before all of the above, US retail sales are set to be published late on Tuesday and are expected to show moderate declines in consumer spending.
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