Another lively week came to a close, with some of the main trends from recent months continuing. Equity markets moved higher but are starting to show signs of fatigue. The Swiss National Bank (SNB) surprised by cutting rates again, while the Bank of England (BoE) and the Reserve Bank of Australia (RBA) kept rates on hold.
Currency Markets
US Dollar (USD)
The US Dollar consolidated the previous week’s gains and managed to edge higher. Despite mixed US economic data, which remains a headwind for the greenback, the DXY index rose 0.3% to close at 105.832.
British Pound (GBP) and Euro (EUR)
Both the Pound and the Euro moved broadly sideways last week. The UK CPI came in as expected at 2.0%, while the Eurozone CPI was 2.6%.
Commodity Currencies
Commodity currencies had mixed performances:
- NZD fell 0.4%
- AUD and CAD rose around 0.3%
- NOK was the week’s winner with a 1% rally against the Dollar
Other Currencies
- CHF fell 0.5%
- JPY fell 1.5%
- MXN had a great week with a 2% rally
Commodities
Oil
Oil had a second strong week in a row but remains within the broad trading range of the past months. Last week, WTI rose 2.7% to close at $80.52.
Precious Metals
Precious metals had a good week until Friday, when better-than-expected US PMI numbers sparked some aggressive selling. Attempts were made to break key technical levels to the downside, but these efforts are most likely to be unsuccessful, and the metals could move strongly to the upside once again. Last week, Gold was marginally lower at $2,322, and Silver was flat at $29.55.
Bonds
Bonds took a breather after a few strong weeks and traded mostly sideways. Last week, the 10y UST yield rose 3bps to 4.26%, and the 10y Bund fell 0.3% to close at 132.588.
Equities
Equities moved higher yet again, frustrating bears once more. The path of least resistance has been to the upside for months, but positioning now looks very bullish. A major top could be close. Last week, the S&P500 index and the DAX both rose 0.9% to close at 5480 and 18163 points, respectively.
Cryptocurrencies
Cryptocurrencies had another negative week, even as risk assets rallied. This underperformance is evident and frustrates bulls. At the time of writing, Bitcoin is down 3% at $64,400, and Ethereum is down 1% at $3,485.
The Week Ahead
Another data-heavy week awaits, and volatility should remain elevated. We have US GDP and Core PCE data, as well as inflation readings from Mexico and Canada. Finally, we have the rate decision from the Bank of Mexico. Good luck and trade safe!
