Geopolitics ease – Oil under pressure

lmportant news this week:

• Wed, 11th, 14:30 CET US Core Consumer Prices Index.
• Wed, 11th, 15:45 CET CA BoC Rate Statement.
• Wed, 11th, 16:30 CET CA BoC Prs Conference.
• Thu, 12th, 14:15 CET EU ECB Interest Rate Decision.
• Thu, 12th, 14:30 CET US Core Producer Price Index.
• Thu, 12th, 14:45 CET EU ECB Press Conference.

BoC and CPI data could shape market direction

Markets remain focused on tomorrow’s Bank of Canada rate decision and upcoming inflation data, both of which could become key drivers for FX and broader risk sentiment. While the Bank of Canada is expected to leave rates unchanged, traders will closely monitor the accompanying statement for clues on future policy. At the same time, CPI data could prove decisive for expectations surrounding central bank actions. A stronger-than-expected inflation reading may reinforce the higher-for-longer narrative and put additional pressure on risk assets.
Oil prices continue to move lower, potentially providing some relief for markets through reduced inflation concerns and lower input costs. Should the US dollar strengthen further, oil could face additional downside pressure, although geopolitical developments remain a major wildcard. Equity markets continue to correct, with the S&P 500 facing renewed losses after a strong year-to-date performance. While historical seasonality suggests that a year with a strong first 100 trading days often ends positively, the current correction may still have room to run.

Market talk

Risk sentiment remains fragile as traders balance lower oil prices against concerns over inflation and monetary policy. The S&P 500 remains under pressure, and stronger CPI data tomorrow could trigger another wave of selling across equities and risk-sensitive assets. FX markets are likely to focus heavily on the Bank of Canada and any changes in policy language, particularly for USDCAD. Overall, markets remain in correction mode, with inflation data and central bank communication likely determining whether the current weakness deepens or begins to stabilize.

Tendencies in the markets

Equities weaker, USD stronger, BTC weak, oil weaker, Silver weak, Gold weak.