Correlations appeared to break down in the aftermath of the FOMC announcement, as market players likely adjusted portfolios and reacted to individual asset catalysts.
Meanwhile, the BOE surprised the markets with a “dovish hold” as a couple of MPC members voted to cut interest rates.
Check out the headlines and economic updates you may have missed in the latest trading sessions!
Headlines:
- New Zealand GDP Growth Rate for June 30, 2025: -0.9% q/q (-0.2% q/q forecast; 0.8% q/q previous); -0.6% y/y (0.0% y/y forecast; -0.7% y/y previous)
- U.S. SEC voted to approve generic standards for listing crypto ETFs
- Japan Machinery Orders for July 2025: -4.6% m/m (-1.3% m/m forecast; 3.0% m/m previous); 4.9% y/y (5.9% y/y forecast; 7.6% y/y previous)
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Australia Employment Change for August 2025: -5.4k (15.0k forecast; 24.5k previous)
- Australia Unemployment Rate for August 2025: 4.2% (4.3% forecast; 4.2% previous)
- Australia Participation Rate for August 2025: 66.8% (67.0% forecast; 67.0% previous)
- Australia Full Time Employment Chg for August 2025: -40.9k (-10.0k forecast; 60.5k previous)
- Australia Part Time Employment Chg for August 2025: 35.5k (25.0k forecast; -35.9k previous)
- Swiss Balance of Trade for August 2025: 3.9B (3.9B forecast; 4.3B previous)
- Euro area Current Account for July 2025: 35.0B (32.4B forecast; 38.9B previous)
- Euro area Construction Output for July 2025: 3.2% y/y (2.1% y/y forecast; 1.7% y/y previous)
- Canada CFIB Business Barometer for September 2025: 50.2 (45.0 forecast; 47.8 previous)
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U.K. Official Bank Rate for September 18, 2025: 4.0% (4.0% forecast; 4.0% previous)
- U.K. BoE MPC Vote Cut: 2.0 (2.0 forecast; 5.0 previous)
- U.K. BoE MPC Vote Hike: 0.0 (0.0 forecast; 0.0 previous)
- U.K. BoE MPC Vote Unchanged: 7.0 (7.0 forecast; 4.0 previous)
- BOE Governor Bailey suggested that there could be further reductions in interest rates
- U.S. Initial Jobless Claims for September 13, 2025: 231.0k (250.0k forecast; 263.0k previous)
- U.S. Philadelphia Fed Manufacturing Index for September 2025: 23.2 (8.0 forecast; -0.3 previous)
- U.S. CB Leading Index for August 2025: -0.5% m/m (-0.1% m/m forecast; -0.1% m/m previous)
- Trump said that the U.K. wants to make adjustments in its trade deal, cites Putin could have no choice but to end war if crude oil keeps sliding
- Intel share prices soared 25% on news of $5 billion investment from Nvidia
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Risk assets didn’t enjoy much calm after the FOMC storm, as volatility remained elevated while the usual correlations barely held up.
Bitcoin drew support from reports that the U.S. SEC voted to approve generic standards for listing crypto ETFs, potentially opening up more investment opportunities in the space. BTC/USD recovered back to the $118K levels and held on to its gains for the rest of the day.
Equity futures were also off to a positive start, although Asian stock markets closed mixed while European indices like the DAX and CAC 40 closed more than 1% higher. U.S. equities got an additional boost from the 25% rally in Intel shares on news of a $5 billion investment from Nvidia, with the S&P 500 index up 0.55% for the session.
Gold tossed and turned, shedding some of its safe-haven gains as the post-FOMC risk rally extended in Asian market hours, before rebounding sharply during the London market open. Another turn lower was seen as U.S. markets opened, however, leading the precious metal to close 0.37% in the red.
WTI crude oil also had a pretty messy run, tossing and turning on geopolitical headlines but ultimately turning lower during the U.S. session when dollar domination came in play and Trump hinted that lower oil prices could force Russian President Putin to end the war.
Treasury yields, which were edging lower throughout the Asian and London sessions, found strong support from better than expected U.S. initial jobless claims data and the Philly Fed index, with 10-year yields closing 3.4 basis points higher.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
Majority of dollar pairs started the day on cautious footing, with the exception of NZD/USD which sold off sharply on weaker than expected GDP data that revealed a sharper contraction in New Zealand.
Australia’s downbeat jobs report also weighed on the Aussie, as the numbers suggested the possibility of another RBA rate cut before the year ends. The Greenback continued to edge gradually higher during the latter half of the Asian session, before profit-taking erased some gains as London markets opened.
The BOE kept interest rates on hold as expected, but dovish expectations picked up on more MPC members voting to ease and BOE Governor Bailey’s commentary on how further reductions in borrowing costs could be possible. Sterling sold off on the announcement, along with other major currencies losing ground to the strengthening USD.
The dollar’s rally accelerated upon seeing upbeat initial jobless claims and Philly Fed index, which further downplayed U.S. economic jitters, and the currency managed to keep its head above water as it moved mostly sideways for the remainder of the New York session.
Upcoming Potential Catalysts on the Economic Calendar
- BoJ Interest Rate Decision at 3:00 am GMT
- New Zealand Credit Card Spending for August 2025 at 3:00 am GMT
- Germany PPI for August 2025 at 6:00 am GMT
- U.K. Retail Sales for August 2025 at 6:00 am GMT
- U.K. Public Sector Net Borrowing Ex Banks for August 2025 at 6:00 am GMT
- France Business Confidence for September 2025 at 6:45 am GMT
- Canada Retail Sales Prel for August 2025 at 12:30 pm GMT
One more major central bank is lined up to announce its policy decision before this busy week comes to a close! We’ll be hearing from BOJ Governor Ueda and his fellow policymakers, as the Japanese central bank is widely expected to keep rates on hold but possibly hint at further tightening.
After that, the U.K. retail sales report could shake things up for the pound while Canada’s retail sales release could also underscore the BOC’s relatively dovish tone.
As always, look out for global trade developments and geopolitical headlines that could influence overall market sentiment. Stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
