Market_Vision1 May 20 OANDA Market Overview: GBPCHF — TradingView

The first point is inflation, because it’s one of the few things we can clearly measure with numbers rather than political speculation. Yesterday, Canadian inflation data was released, and this morning, British inflation data also came. The scenes in the two are almost the same. After the strong rise in inflation we saw immediately after the war with Iran broke out, inflation has gradually started to fall. Not only did it stop rising, it was in some cases lower than last month.

This is a very important development for the market. Because this means that major economies are beginning to adapt to the current situation. Yes, there was an initial shock due to the rise in oil and energy, but so far we haven’t seen anything like 2022 where inflation is completely out of control. If inflation in advanced economies remains below 3%, central banks may not have to raise interest rates significantly.

This isn’t always good news for currencies, which tend to weaken when expectations of rate hikes fade away. When it comes to markets such as risk stocks and cryptocurrencies, the story is completely different, as falling inflationary pressures have given markets a positive boost.

If the upcoming U.S. inflation data comes out in the same way—below expectations or lower than previous numbers—then we could see strong gains for U.S. stock indexes, digital currencies, and many other assets.

Therefore, the upcoming US inflation data will be very important and must be watched closely. So far, current data gives the impression that the economic situation is not as catastrophic as some feared, reducing the likelihood of a major collapse in the short term.

Politically, the most compelling story right now is the ongoing attempt to limit Trump’s power over the Iran dossier. Interestingly, the Democrats finally succeeded in passing the vote in the Senate after many attempts.

If you remember, the vote was clearly Republican at first, and then with each new vote, the gap started to narrow. Now that some Republicans themselves are beginning to support the idea of ​​limiting Trump’s military action, this is a very important political development.

The document will now be transferred to Congress, where things have become even more sensitive as nearly everyone enters the election atmosphere. Many politicians do not want to appear to support a long war before the election.

Even if Trump later attempts to use his veto, getting to this point means he faces real domestic political pressure, especially as divisions arise within his own party.

At the same time, there is growing controversy over blocking review of some of Trump’s old tax returns, and that type of news typically doesn’t sit well with American voters because it gives the impression of a conflict of interest or an attempt to hide sensitive information, which could hurt his popularity.

The greater the internal political pressure on him, the greater the chance of reaching some kind of solution with Iran, especially since Tehran continues to present different options for negotiations. If there is any real breakthrough, this will have a positive impact on the oil market and financial markets in general.

The big story today is the Fed meeting minutes. Usually these meeting minutes don’t have a strong impact on the market, but this time it’s different. There’s inflation, there’s new leadership at the Fed, and everyone wants to know what central bank members are thinking now and whether they’re still leaning toward tightening policy.

Data will be released after the evening session, so we may see the real impact tomorrow. However, strong trends and significant fluctuations are expected after the minutes are released.

Overall, we continue to operate as normal, follow the news calmly, and prepare for any strong market moves. Good luck with your trading and see you at the conference.