Markets Week Ahead: Gold, Dow Jones, US Dollar, Fed and ECB Minutes, Earnings
In financial markets, gold suffered the worst week in 5 months. This is as the Dow Jones outpaced the tech-heavy Nasdaq 100. Longer-dated government bond yields from the developed world accelerated higher, perhaps speaking to rising confidence in the broader economic outlook and creeping inflation expectations.
In foreign exchange markets, the haven-linked US Dollar inched slightly lower. The Canadian Dollar took the spot as one of the best-performing major currencies. The New Zealand Dollar suffered this past week as the RBNZ left rates unchanged but left the door open to the option of implementing negative rates.
Initially, a key event risk heading into the new week was a 6-month review of the US-China phase one trade deal. But that has been postponed indefinitely according to people familiar with the matter. With that in mind, the week ahead is fairly light in economic event risk. Major US retailers like Walmart, Target and Home Depot will report earnings.
Japan’s second-quarter GDP print will offer further insight into the state of global economic health. This is as the Fed and ECB release the minutes of their latest monetary policy meetings. Global equity markets remain overall jubilant despite the ongoing stalemate between politicians in the US over a second fiscal package. What else is in store for markets in the week ahead?
The Euro may rise if preliminary Q2 GDP data and PMI statistics shows a brighter than-expected-picture and kindle hopes of a smoother recovery.
The Dow Jones Industrial Average may face increasing selling pressure after the stock index moved back to the pre-Covid levels. A rising inflation outlook may lead to a less-dovish Fed and thus a stronger US Dollar.
USD/MXN breaks below downtrend support as Banxico cuts rates to help restart the economy
Upside in Crude Oil struggling ahead of OPEC meeting. Cartel likely to maintain wait and see approach.
Gold prices suffered the worst week in 5 months, is this the beginning of a new trend? The short-term outlook still seems to favor the upside on cheap global borrowing costs.
The US Dollar may rise, buoyed by haven demand as fiscal stimulus talks stagnate and swelling tensions between Washington and Beijing sink trade talks.
Gold had some big moves last week, and while vol is expected to die down a bit, it will be important to see if gold can hold its ground in the coming days/weeks…
The Sterling breakout remains vulnerable as price continues to contract below trend resistance. Here are the levels that matter on the weekly chart.
A handful of equity markets made key technical moves last week that could open the door for bullish continuations. Here are the levels to watch in the week ahead
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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