Borrow
Hawkish central bank expectations dampen market sentiment, boosting dollar
Recent economic data and central bank communications have dampened the market's appetite for risk assets, leading to a stronger US dollar and a pullback in commodities and equities, according to Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank.
Hawkish central bank expectations dampen market sentiment, boosting dollar
Recent economic data and central bank communications have dampened the market's appetite for risk assets, leading to a stronger US dollar and a pullback in commodities and equities, according to Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank.
The week began with the release of the Federal Open Market Committee (FOMC) minutes, which revealed that many Fed members questioned whether keeping rates "high for longer" would be sufficiently restrictive to tame inflation, suggesting that further rate hikes might be necessary.
In the UK, Prime Minister Sunak announced a general election for early July, earlier than expected, diminishing hopes for a Bank of England (BoE) rate cut in June. Additionally, hotter-than-expected British CPI data further reduced the likelihood of policy easing in the near term.
In the euro area, data showed that wage growth increased 4.7% in Q1, raising concerns among officials who had been relying on a slowdown to keep inflation under control.
Finally, stronger-than-expected US economic data, including accelerating services and manufacturing PMIs and soft jobless claims, dealt a final blow to market bulls.
"If the reflation trade loses momentum due to a hawkish shift in major central bank expectations, we shall see a period of pullback and profit taking in risk assets, and a further dollar appreciation against major counterparts," Ozkardeskaya said.
US crude oil prices extended losses below the 100-day moving average, while copper futures and gold prices also declined significantly. The US dollar index strengthened past the 50-day moving average, and major currency pairs such as EURUSD, GBPUSD, and AUDUSD faced downward pressure.
Amid the market turmoil, Nvidia remained a bright spot, jumping more than 9% after beating revenue expectations and providing a strong forecast. Ozkardeskaya believes that the company's positive outlook and the growing demand for AI suggest that the $1000 per share level could become a new support for investors looking to capitalize on the stock's bullish momentum.
RELATED ARTICLES
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
RBA’s next move: Why a November cut could reset corporate risk budgets
Australia’s unemployment rate has risen to a four‑year high, sharpening the case for another Reserve Bank easing as growth moderates. With GDP expanding 0.6% in the June quarter and 1.8% year on year, ...Read more
Banking
PayPal Open Debuts in Australia: A Unified Platform for Business Growth
Sydney, 14 October 2025 – In a significant move to bolster commerce capabilities for businesses across Australia, PayPal has officially launched its new merchant platform, PayPal OpenRead more
Banking
RBA holds interest rates steady at 3.6% amid strong labour market and inflation concerns
In a widely anticipated move, the Reserve Bank of Australia (RBA) announced that it would maintain the cash rate at 3.6%. The decision was unanimous, reflecting a cautious approach as the central bank ...Read more
Banking
Hardship is the new conduct frontier: A bank’s playbook for turning ASIC scrutiny into ROI
ASIC has put financial hardship on its 2025 enforcement radar, shifting lender performance from a customer service problem to a board-level conduct risk. This case study examines how an Australian ...Read more
Banking
RBA flags price uplift as Home Guarantee expansion accelerates: what it means for banks, builders and the bottom line
Australia’s expanded Home Guarantee Scheme (HGS) has been brought forward to 1 October, compressing a multi‑year policy shift into weeks. The RBA expects the changes to lift borrowing capacity and add ...Read more
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
RBA’s next move: Why a November cut could reset corporate risk budgets
Australia’s unemployment rate has risen to a four‑year high, sharpening the case for another Reserve Bank easing as growth moderates. With GDP expanding 0.6% in the June quarter and 1.8% year on year, ...Read more
Banking
PayPal Open Debuts in Australia: A Unified Platform for Business Growth
Sydney, 14 October 2025 – In a significant move to bolster commerce capabilities for businesses across Australia, PayPal has officially launched its new merchant platform, PayPal OpenRead more
Banking
RBA holds interest rates steady at 3.6% amid strong labour market and inflation concerns
In a widely anticipated move, the Reserve Bank of Australia (RBA) announced that it would maintain the cash rate at 3.6%. The decision was unanimous, reflecting a cautious approach as the central bank ...Read more
Banking
Hardship is the new conduct frontier: A bank’s playbook for turning ASIC scrutiny into ROI
ASIC has put financial hardship on its 2025 enforcement radar, shifting lender performance from a customer service problem to a board-level conduct risk. This case study examines how an Australian ...Read more
Banking
RBA flags price uplift as Home Guarantee expansion accelerates: what it means for banks, builders and the bottom line
Australia’s expanded Home Guarantee Scheme (HGS) has been brought forward to 1 October, compressing a multi‑year policy shift into weeks. The RBA expects the changes to lift borrowing capacity and add ...Read more
