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- US Dollar Strength: The US Dollar broke resistance and advanced for the week, driven by weak PMI data. Upcoming payrolls numbers will be crucial for its movement. The DXY index concluded the week at 104.187, up by 0.7%.
- Euro Challenges: The Euro is facing headwinds due to weakening economic data, especially from Germany.
- Pound Retreats: The British Pound declined against most majors as UK PMI data revealed contraction.
- Commodity Currencies: AUD, NZD, NOK, and CAD slightly retreated for the fourth consecutive week. AUD maintained parity with the USD, while NZD, NOK, and CAD dipped around 0.5%. However, the MXN stood out with a robust 1.8% rally.
- Oil Decline: Oil experienced its second consecutive weekly decline due to global economic concerns and projections of reduced demand. WTI closed just below $80 after a 1.7% drop.
- Precious Metals Shine: Precious metals performed well despite rising yields and USD. Gold gained 1.3% to reach $1,914, while Silver surged over 6% to $24.22.
- Equities and Bonds: Equities received support as yields remained subdued. S&P500 increased by 0.9%, closing at 4,404 points, and the DAX gained 0.7% to 15,684 points. Bonds were mostly steady, with 10y UST yield falling 1bp to 4.24%, and 10y Bund rallying 0.6% to 132.121 points.
- Cryptocurrency Scenario: Cryptocurrencies are attempting to stabilize following the previous week’s sharp decline. While Bitcoin and Ethereum hover around $26,000 and $1,650 respectively, a short-term consolidation may precede further downward movement.
Week Ahead:
The markets are grappling with Powell’s Jackson Hole remarks, emphasizing data-driven trends. This places a premium on upcoming data releases. Notably, Eurozone CPI and US GDP, ADP, and NFP data will be influential. Trade wisely and good luck!
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