Market sentiment was high last week.superior Wall StreetFutures Tracking Nasdaq 100 rose 7.28%, the best 5-day performance since March.This is as S&P 500 Dow Jones futures and Dow Jones futures rose 6.76% and 6.39%, respectively, their biggest gains since November 2020. Dax 40 rose 3.44%. The Hang Seng Index rose 2.89%.
Almost all G10 currencies outperform Dollarinclude New Zealand dollar, Australian dollar, EUR, GBP, Canadian dollar and Japanese Yen. The DXY U.S. Dollar Index has lost 1.32% over the past two weeks, its biggest drop since April 2021. How to explain this dynamic? Just look at the Fed.
In recent weeks, we have seen the market Sharp pullback on Fed rate hike expectations in 2023. The central bank’s cautious comments have been reducing the likelihood of a 50bps rate hike in September. Traders appear to have turned their attention from inflation concerns to a recession. Data since early May suggest that The market is seeing the Fed increasingly Lagging behind in tackling CPI one Year.
This has led to a broad decline in U.S. Treasury yields.This combined with a weaker dollar has also been benefiting gold price. Now, for the week ahead, all eyes will be on Friday’s nonfarm payrolls. Will the market overtake itself? Job creation is expected to slow, but unemployment and wages are expected to remain strong.
Outside the world’s largest economy, the Bank of Canada is expected to raise interest rates by 50 basis points on Wednesday. Australia releases first-quarter GDP data. China’s May manufacturing PMI data will also be closely watched. The weak data could fuel fears of a global economic slowdown, potentially weighing on the yuan. What else is there to look forward to in the future market?
USD performance vs.currency and gold
The Aussie currently has solid fundamentals, but external factors continue to weigh on the Aussie.will AUD/USD walk my own path?
bitcoin It continues to hover above key support levels as JPMorgan says there is significant upside in the space. Is a breakout forming?
The world’s major stock indexes saw some much-needed respite last week, but the relief could be a by-product of a liquidity drain ahead of the holiday weekend. With growth forecasts collapsing and central banks pledging to lower inflation, a further bearish pullback seems inevitable.
Gold prices could continue to recover in the coming days if U.S. economic data deteriorates and cools bets on the outlook for more aggressive monetary policy from the Federal Reserve.
Stocks snapped a seven-week losing streak, with indexes reacting to key downtrend support. Important levels on the weekly technical charts for the SPX500, Nasdaq and Dow.
The DXY Dollar Index has been on a steady climb for a year; but the currency seems to be taking a breather. With EUR/USD retreating from 105 or recovering from 1.0350, we now find the USD in direct conflict with an important support level.