Market Outlook: Powell's Comments to Set the Tone Amid Asia Tensions and Trade Developments

As the Federal Open Market Committee convenes in the U.S., market anticipation is centered on Federal Reserve Chair Jerome Powell's remarks at the FOMC press conference, with interest rates expected to remain unchanged. The CME's FedWatch tool indicates a 97.6% chance of steady rates, while Polymarket traders see a 98.3% chance, shifting focus to the outlook. Bankinter analysts caution against a potential risk asset rally, citing reduced container traffic from China to main U.S. ports and anticipating a cautious tone from Powell on future cuts and inflation. The recent military escalation between India and Pakistan adds to the cautious sentiment. Despite this, spot gold prices have retreated over 1.7% as traders remain optimistic about a U.S.-China trade deal, and cryptocurrency prices are rising, with Bitcoin adding 3% in the past 24 hours and the broader crypto market increasing 2.57%. Ethereum's Pectra upgrade has gone live, featuring 11 major improvement proposals, but its impact on ETH's decline against BTC remains to be seen. As markets navigate international tensions and trade developments, the focus may shift between safe havens and volatility, with the largest bitcoin ETF attracting greater net inflows than the largest gold ETF since the start of the year.