Dollar Firms and Oil Rebounds Ahead of Fed Decision
Summary
Investors are gearing up for a critical period marked by central bank decisions, economic data releases, and corporate earnings reports, with a particular focus on interest rates and economic growth. Key events include the UK Budget announcement and earnings reports from major corporations like Microsoft and Alphabet, which are expected to provide insights into fiscal policy and business conditions.
Attention is also directed towards upcoming US economic indicators, including GDP and core PCE data, as well as the European Central Bank's (ECB) decision, which will offer further signals regarding growth, inflation, and interest rates.
Market Reactions
The currency markets have already shown reactions to recent policy surprises, notably the Reserve Bank of New Zealand's (RBNZ) unexpected decision to maintain interest rates at 2.75%, which led to a 1.7% drop in NZD/USD. The US dollar remains strong ahead of the forthcoming announcements. In the commodities market, oil prices have rebounded following a decline, driven by renewed concerns over Middle Eastern supply disruptions and geopolitical risks.
Key Focus for Today
Today's market focus includes the Bank of Canada's (BoC) decision at 21:45 GMT+8 and the EIA inventory report at 22:30 GMT+8, leading up to the Federal Reserve's announcement at 02:00 on October 29 and Chair Warsh's press conference at 02:30. The market consensus anticipates that the Fed will maintain its target interest rate range of 3.75–4.00%, but any guidance regarding December could influence the dollar, yields, and risk assets significantly.
Global Market Review (October 28, 2026)
On October 27, the Dow Jones increased by 15.99 points (0.03%) to 52,377.57, the S&P 500 rose by 0.60% to 7,722.60, and the Nasdaq Composite gained 1.18% to 26,477.81, with AI stocks leading the gains. The Dollar Index stood at 102.37 (+0.34%), while the 2-year Treasury yield was at 4.737% (+2.3 bps) and the 10-year yield at 4.997% (+0.8 bps). Brent crude was priced at $114.15 (-1.43%), WTI at $99.90 (-1.83%), and gold at $4,057.80 (+1.03%).
Economic Calendar Highlights
Key events scheduled for October 28 (GMT+8) include:
- 04:30 - US API Crude Stocks
- 08:30 - AU CPI YoY SEP
- 09:00 - RBNZ Rate Decision
- 15:00 - Germany GfK Consumer Confidence NOV
- 21:45 - BoC Rate Decision
- 22:30 - US EIA Crude Stocks
On October 29 (GMT+8), significant events include the Fed Rate Decision and Press Conference, Euro Area Economic Sentiment, US Core PCE Price Index, US GDP Annualized QoQ Advance, and Initial Jobless Claims.
Market Analysis
EUR/USD
The EUR/USD pair shows a cautiously bearish trend with resistance at 1.1191 and support at 1.1112. The firm dollar and uncertainty regarding the Fed's December rate path weigh on the euro.
GBP/USD
The GBP/USD pair also displays a cautiously bearish outlook, with resistance at 1.3353 and support at 1.3278. The UK Budget will be a key factor influencing market sentiment.
USD/JPY
The USD/JPY pair indicates a neutral to cautiously bullish bias, with resistance at 158.20 and support at 157.52, as the US-Japan rate gap favors the dollar.
US Crude Oil Futures
US crude oil futures show a neutral bias with resistance at 103.75 and support at 99.11, rebounding due to geopolitical supply concerns.
Spot Gold and Silver
Spot gold has a neutral to bearish bias, while silver shows a cautiously bearish outlook. Both are influenced by the dollar's strength and oil price fluctuations.
Equity Indices
The Dow Jones and NASDAQ 100 exhibit neutral to cautiously bearish and bullish biases, respectively, with upcoming earnings reports from major tech companies expected to impact market sentiment.
Bitcoin
Bitcoin shows a neutral bias, recovering from earlier lows as technology sentiment improves, with upcoming Fed announcements likely to influence its direction.
Conclusion
As central banks prepare for significant announcements, market participants are closely monitoring economic indicators and corporate earnings that could shape the financial landscape in the coming weeks.