- Stocks on Fire; More to come!
- EURUSD could flirt with the 1.18 roadblock resistance
- Bank of Japan to keep us guessing!
Weekly Market Playbook
What a week! US stocks were on fire again — the S&P 500 and Nasdaq 100 both ripped to fresh record highs. The Nasdaq surged more than 2%, with Tesla stealing the show after jumping 7.5%. Not to be outdone, gold smashed through all-time highs before cooling off into Friday’s close.
What’s driving this? It’s all about the Fed meeting on Wednesday. Traders are betting big on a 25bps cut — the first of potentially three by year-end if futures pricing is right. Bond yields have already dropped to fresh lows in anticipation, giving both equities and gold extra juice.
Here’s the kicker: the Fed is preparing to ease despite inflation still running hot. CPI came in at 2.9% year-on-year, well above the 2% target. But with the labour market softening, it looks like Powell & Co. are prioritising growth risks over sticky prices.
Europe & UK: Same Game, Different Spin
- ECB: No surprises here. Rates unchanged, inflation forecasts cut below target, and the market reading is: don’t expect more cuts soon. The euro keeps grinding higher, with 1.18 looming as a key resistance.
- UK: GDP flat — the definition of going nowhere. Add in some political drama (sacked ambassador, deputy PM gone the week before) and you’d expect sterling to wobble. Instead, the pound closed at four-week highs, thanks more to USD weakness than UK strength.
This week, all eyes are on the UK’s Consumer Price Index, due Wednesday. Analysts expect inflation to print at 3.8% — almost double the BoE’s 2% target. That release lands just one day before the Bank of England’s rate decision on Thursday. With inflation still sticky, it’s hard to see the MPC rushing to cut, especially after the razor-thin 5–4 vote at the last meeting.
Looking Ahead: Central Bank Super Week
It’s one of those weeks where traders can’t afford to blink:
- Fed (Wednesday) – Rate cut of 25bps is priced in. The bigger trade is in the guidance: how many cuts after this?
- UK CPI (Wednesday) – A hot print above 3.8% could keep the BoE pinned. A softer reading might reopen the debate.
- Bank of England (Thursday) – Likely on hold at 4%. Watch the split in the vote for clues.
- Bank of Japan (Friday) – Still under pressure to let rates move higher given rising wages and inflation. If they finally shift, USD/JPY could see a sharp correction as the carry trade unwinds.
- Bank of Canada (Wednesday) – Expected to trim rates to 2.5% from 2.75%.
That’s four major central banks — plus a critical UK inflation release — all packed into one week.
How We Play It with PropIQ
Here’s where most traders get caught: they guess what central banks will do and load up one way. That’s gambling. With PropIQ, we trade the probabilities.
- Map the events – CPI, central bank meetings, job data.
- Understand the reactions – how markets historically respond to different outcomes.
- Work the setups – proven strategies that stack the odds, rather than hoping to be right.
Remember: markets don’t care about the “news,” they care about how reality lines up against expectations. That’s where the edge is.
My Take
- US: If the Fed cuts as expected, yields could drift lower and stocks/gold have room to push higher. But if guidance is cautious, expect some choppiness.
- FX: EUR/USD has a real shot at challenging 1.18. USD/JPY is a ticking time bomb if the BoJ finally moves. Sterling’s strength looks more about dollar weakness than UK fundamentals — Wednesday’s CPI will be the real test.
Disclaimer: This market commentary is provided for educational and informational purposes only. It reflects the opinions of the author at the time of writing and should not be taken as financial or investment advice.
Funded Trading Plus operates evaluation and simulated funded programs, not live trading accounts. All references to trading, strategies, or market opportunities relate to simulated trading environments. Past market performance or individual trader results are not indicative of future outcomes.
Trading carries significant risk of loss. You should carefully consider your own circumstances and risk tolerance before engaging in any form of trading activity. Nothing in this publication constitutes an offer to participate in regulated financial markets.