Far too early to call with any real degree of conviction but the Dollar finally appeared to make a stand last week. The DXY briefly reached all the way down below 98 before managing to climb back up to a respectable weekly close in the green. Recent developments have not been kind to the Greenback, to put it mildly. The Euro is now at its strongest versus the Dollar in three years, while safe-haven currencies such as the Swiss Franc are at their highest levels in well over a decade. Pick any currency from the menu and chances are the Dollar is currently facing yearly lows against it.
On the other side of the equation, gold has thrived so far this year, culminating in yet another record high last week. The precious metal tapped $3,500 an ounce last Tuesday, which is all the more insane given that prices were a mere $2,600 just four months ago. The jubilation was sadly short-lived, as subsequent profit-taking dragged gold down to a weekly close in the red, painting a nasty looking candle along the way.
The uncertainty surrounding tariffs continues to be the main driver behind market sentiment but the fog of war may finally be starting to clear. New trade deals will take time to establish but early signs are allowing some investors to be cautiously optimistic. All three major US indices closed in the green last week, with the S&P 500 and Nasdaq Composite in particular gaining 4.6% and 6.7% respectively. Stock markets in Europe and Asia also continued to display positive momentum, with the former having all but shrugged off the recent selling spree.
Fundamentals will once again have their part to play this coming week, which is a big one in terms of economic data and company earnings. No fewer than 180 companies within the S&P 500 are set to publish their quarterly earnings this week, including the likes of Apple (AAPL), Amazon (AMZN), Meta (META), Microsoft (MSFT) and many more. The economic calendar also has a lot to offer starting on Wednesday with the latest PCE Price Index, which is expected to show significant drops in inflation figures. ADP employment numbers will also drop on the same day, but traders will already have their eye on the more impactful Non-Farm Payrolls later in the week. Last month’s figures wildly surpassed expectations so it will be interesting to see if there are any revisions to the previous publication or if the April figures show the same trend. Of course, any news relating to the ongoing tariff situation has the potential to move markets at any time, as will any developments concerning Ukraine for that matter. Busy week ahead.
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