The main news last week was the conclusion of the US-Iran ceasefire, which initially caused some market jitters. Nevertheless, this reaction was brief, and a sense of calm prevailed throughout the week.
The US Dollar experienced a relatively quiet week, with the DXY index recording slight gains, reaching 100.965.
Both the Euro and the Pound remained subdued due to the lack of significant economic data.
Commodity currencies enjoyed a positive trend for the second consecutive week. The AUD, CAD, and NOK all saw minor gains, while the NZD rose by 0.9% following the RBNZ’s 25-basis-point rate hike. Elsewhere in the FX market, the JPY experienced marginal losses, and the CHF declined by 0.6% against the US Dollar.
Oil prices spiked after the ceasefire in Iran ended, but did not continue to rise throughout the week. WTI finished the week up 4% at $71.51.
Precious metals could not maintain their gains from the previous week, retreating sharply after the oil price increase. These metals remain highly sensitive to oil movements and anticipated inflation, which frustrates bullish investors. Gold dropped 1.3% to $4,120, while Silver fell 4% to $59.86.
Bonds faced a second consecutive week of losses due to rising inflation expectations. The 10-year UST yield rose 8 basis points to 4.56%, while the 10-year Bund fell 0.8% to close at 125.576.
Equities, particularly in the US, continue to demonstrate resilience despite bearish signals and the broader geopolitical context. The S&P 500 index rose 1% to 7,573, while the DAX declined 2.8% to close at 25,067.
Lastly, cryptocurrencies outperformed for the second week, offering hope to crypto enthusiasts. However, given their underperformance in recent months, it’s premature to declare a bottom. At the time of writing, Bitcoin is up 2% at $64,300, and Ethereum has risen by 4% to $1,820.
The Week Ahead:
We’re back to monitoring headlines from Iran, as a single headline can change the situation instantly. Data-wise, upcoming events include the BoC interest rate decision (no change anticipated) and the crucial US CPI report.
Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument. All market prices, data, and other information are not warranted as complete or accurate and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of Coeus Capital. Coeus Capital does not assume any liability whatsoever for the content of this newsletter or make any representations or warranties as to the accuracy and completeness of any information contained in this newsletter.
