Policy meetings today will be held at the ECB and SNB; both are expected to reduce their interest rates by 0.25%.

1. There will be central bank policy meetings today concerning two major currencies: the Euro (European Central Bank) and the Swiss Franc (Swiss National Bank). Both banks are expected to announce cuts in their interest rates by 0.25% amid a trend of monetary easing in major economies, which will be given a tailwind by the increasing chance of a US rate hike next week (seen at 98% by the CME FedWatch tool) following steady US inflation data which was released yesterday.
2. US CPI (inflation) data released yesterday was exactly as expected: the month-on-month rate was unchanged at 0.3% and the annualized rate ticked higher to 2.7%. There will be a release later today of US PPI data which will also give a window into inflationary pressures.
3. Stock markets globally mostly rose yesterday, especially following the release of US inflation data. The move was most pronounced in the USA, where the tech-based NASDAQ 100 Index rose firmly to close near its high and make a new record high price. Trend and momentum traders will be interested in being long of this index, which is in a strong long-term bullish trend having risen by more than 27% over 2024.
4. In the Forex market, since today’s Tokyo open, the Australian Dollar has been the biggest gainer and the Euro the biggest loser. The EUR/USD currency pair remains in a valid long-term bearish trend and made a bearish breakdown below the big round number at $1.0500 yesterday. The AUD/USD currency pair touched a new 4-month low, although it has rebounded during the Asian session as the US Dollar weakened following the US CPI data release yesterday.
5. Cocoa futures traded at a new 7-month two days ago, which was the highest closing price in over 6 months. Cocoa has seen a strong increase in value over the past few weeks, and the market will remember the spectacular rally in Cocoa in 2023 which saw the price of the superfood triple within only 4 or 5 months. Trend traders will be interested in being long of Cocoa futures. Unfortunately for retail traders, the smallest Cocoa future available has a position size of $100,000 but there is a Cocoa exchange-traded commodity (ETC) ticker COCO available on the London Stock Exchange which is very affordable. The “ETC aims to replicate the Bloomberg Cocoa Sub Total Return Index (BCOMCCTR) by tracking the Bloomberg Cocoa Sub Excess Return Index.”

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