Markets Today: Gold Retreats, Equities Choppy as Markets Digest Fed Decision, DAX Up 1%. BoE Meeting Up Next

[Ben Graham]

Asia Market Wrap - Choppy Trade as Markets Digest Fed Decision

Most Read: USD/CAD Outlook: Head and Shoulder Pattern in Play as Fundamentals Provide Interesting Dilemma

Global stock markets were unstable on Thursday after the US Federal Reserve announced its first interest rate cut of the year. Investors were left uncertain about the speed of future rate cuts because the Fed suggested it would take a cautious, step-by-step approach to further easing.

Contracts for the S&P 500 advanced 0.5% while those for the Nasdaq 100 gained 0.7%, after the underlying benchmarks posted minor declines following the Fed’s decision.

In Asia, a broad index of shares, the MSCI Asia-Pacific Index, fell by 0.1% due to declines in Australia and New Zealand. Meanwhile, Chinese stocks had a mixed day, moving between gains and losses.

In contrast, shares in South Korea jumped 0.8%, Taiwan's shares rallied 0.4%, and Japan's Nikkei 225 index added 1%.

Tomorrow we have the BoJ meeting. For more information on the meeting and the impact on USD/JPY, read Bank of Japan (BoJ) Meeting Preview: Maintaining the Status Quo. Implications for USD/JPY

European Open - European Shares Edge Higher

On Thursday, European stocks went up slightly after the Federal Reserve's first interest rate cut since December 2024. The overall European STOXX 600 index rose by 0.5% with widespread gains across different sectors.

In Denmark, Novo Nordisk's shares increased by 2.6% after new data showed that an experimental pill version of its drug, Wegovy, helped people lose 16.6% of their weight in a study. This was a better result than what was seen in previous studies of the injectable version of the drug.

On the other hand, the SIG Group, a Swiss packaging company, saw its shares drop by 20% and trading was temporarily stopped after the company warned that its 2025 profit would be lower than expected and that it was suspending its cash dividend.

Additionally, British fashion retailer Next lost 5.5% of its share value. This happened after the company announced it expects sales growth in the UK to slow down in the second half of the year, which overshadowed its report of a 13.8% profit increase in the first half.

On the FX front, the US dollar went up on Thursday, continuing its recent rebound. This happened as traders tried to understand the Federal Reserve's cautious approach to future interest rate cuts. The dollar had initially fallen to its lowest point since February 2022 immediately after the Fed's announcement but then bounced back strongly.

Elsewhere, the New Zealand dollar fell sharply after new data showed the country's economy shrank much more than expected in the second quarter. This has led to speculation that there will be more significant interest rate cuts this year. The Australian dollar also weakened after Australia's employment numbers unexpectedly dropped in August.

After its initial drop, the dollar index climbed as much as 0.44% on the day to 97.074, and continued to rise on Thursday to 97.163.

The euro slipped 0.2% to $1.1791, after briefly jumping to its highest level since June 2021 on Wednesday in an immediate reaction to the Fed's news.

The British pound also eased by 0.2% to $1.3604, after briefly leaping to its highest point since July 2.

The US dollar went up by 0.2% against the Japanese yen, reaching 147.245 yen in the latest trading session. This happened after it had initially weakened as much as 0.67% to its lowest point since July 7, before quickly bouncing back.

Currency Power Balance

Source: OANDA Labs

Oil prices went down for the second day in a row on Thursday. This happened after the US Federal Reserve cut interest rates as expected. Traders were focused on concerns about the US economy and the risk of too much oil supply.

Brent crude futures fell by 26 cents, or 0.38%, to $67.69 per barrel. US West Texas Intermediate futures dropped by 28 cents, or 0.44%, to $63.77 per barrel.

For more information on Oil, please read WTI Oil Rallies 1% After Ukrainian Attacks on Russian Oil Facilities, Russia Sanction Calls Grow

On Thursday, gold prices continued to fall. This happened because the US dollar became stronger after the Federal Reserve cut interest rates by a quarter of a percent, as expected, and hinted that it would be cautious about making any further policy changes.

Spot gold fell by 0.6% to $3,637.41 per ounce, after reaching a record high of $3,707.40 on Wednesday. US gold futures for December delivery also slipped by 1.2% to $3,671.30..

For more information on Gold, read Gold (XAU/USD) Soars to Breach $3700/oz. FOMC Meeting Next, Will the Rally Continue?

Bank of England (BoE) Meeting and Final Thoughts

Looking at the economic calendar, the biggest event of the day will be the Bank of England policy meeting.

The Bank of England is expected to keep interest rates at 4%. According to LSEG data, markets are pricing in around 97.2% probability that rates will remain at 4%.

This is supported by official figures from Wednesday, which showed that British inflation was 3.8% in August. This number has made investors more confident that the central bank is unlikely to cut rates again very soon.

However, a survey of economists by Reuters conducted earlier this month found that they still expect one more rate cut before the end of the year.

There is also a meeting between US President Donald Trump and UK Prime Minister Keir Starmer as well as a press conference. Whether there will be any updates on trade agreements remains to be seen and if there is it could shake up markets.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - DAX Index

From a technical standpoint, the DAX is bouncing this morning and is trading up around 0.9%.

If the daily candle can close at current levels or higher that could be seen as a morningstar candlestick formation, which would set the index up for further gains.

A candle close on the daily timeframe above the 23750 handle will be needed for a change in structure which would further enhance the probability of further upside.

Looking at the RSI period-14 and it is approaching the 50 handle. with a break above leading to a shift in momentum.

Beyond the 23750 handle resistance is provided by 20 and 100-day MAs which rest at 23824 and 23922 respectively.

Support for now rests at 23471 and 23212 respectively.

DAX Daily Chart, September 18. 2025

Source: TradingView.com (click to enlarge)

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