Focus on FOMC

Frank Walbaum

lmportant news this week:

Wed, 29th Jul, 03:30 CET AU Consumer Price Index.
Wed, 29th Jul, 20:00 CET US FOMC Interest Rate Decision.

Thu, 30th Jul, 13:00 CET UK BoE Interest Rate Decision.
Thu, 30th Jul, 14:30 CET US PCE Price Index.
Fri, 31st Jul, tentative JP BoJ Interest Rate Decision.

Rotation continues as markets await the FOMC decision

Equity markets remain mixed as investors continue rotating out of AI and high-growth technology stocks into more traditional blue-chip names. The Dow Jones is outperforming, while the DAX remains one of the strongest major indices, supported by industrial and value-oriented sectors. The Nasdaq continues to lag as technology stocks struggle to regain momentum. Attention now turns to today's FOMC decision, with markets having largely priced in another rate hike. The focus will be less on the decision itself and more on the Fed's guidance regarding inflation and future policy.
Precious metals are recovering after recent weakness, suggesting bargain buying is emerging ahead of the central bank announcement. Cryptocurrencies have also stabilised, with Bitcoin and major altcoins trading firmer as sentiment improves slightly. In FX markets, the Euro and British Pound remain broadly sideways against the US Dollar, while the Australian Dollar is underperforming. The weakness in AUD points to a slightly more cautious risk environment, even as equity markets remain relatively resilient.

Market talk

Today's FOMC meeting is expected to be the main market driver. If the Fed maintains a hawkish tone and signals that rates will remain higher for longer, the US Dollar could strengthen further and renew pressure on equities, metals, and cryptocurrencies. A more balanced or dovish message, however, could support another leg higher in risk assets. With markets already positioned for a rate hike, the wording of Chair Jerome Powell's press conference is likely to determine the next major move across FX, equities, and commodities.

Tendencies in the markets

Equities mixed, USD stronger (FOMC!), crypto positive, oil sideways, Silver sideways, Gold sideways.

Author

Frank Walbaum

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.