Strap in for a big day in financial markets as we get two central bank decisions and a trio of major earnings reports.
The day kicked off with big bids in gold that saw a rally as high as $5311. It’s currently pared back to $5275 but is still up $86 on the day, or 1.9%. S&P 500 futures are up 0.2% and the US dollar has bounced after yesterday’s big fall.
The Fed is the highlight but the Bank of Canada is up first at 9:45 am ET. There’s little chance of a move on the 2.25% overnight rate and the market is deeply uncertain of what comes next with pricing showing a 25% chance of a cut in the next few months before pricing in a 30% chance of a hike late in the year. Economic data has been confusing with various inflation measures moving in different directions and volatile jobs numbers. Housing continues to be a drag.
The FOMC decision is at 2 pm ET and — again — there’s no real chance of a move here, though we’ll likely get another dissent for 50 bps from Miran, who is in his final meeting. The Fed funds futures curve is pricing in 48 bps in easing this year. Powell has been highlighting the case for more cuts but we are going to want an updated view on where inflation is headed.
After hours, a trio of Mag7 earnings are in focus with MSFT, META and TSLA. All three are slightly higher pre-market but there will be some big moves after hours. This week, they have moved nicely higher after a poor stat to the year. The options implied moves are MSFT 4%, META 6% and TSLA 8%.
Other earnings after the close include IBM, Whirlpool, United Rentals and Waste Management.
