An assassination attempt on ex-President Donald Trump hit the headlines late on Saturday night, and this will undoubtedly have an effect on US election predictions and markets on Monday morning.

Last week was characterised by a continuation of the general market trends. US CPI came in 0.1% lower than expected, confirming inflation’s (slow) downward trend. Markets greeted this inflation reading with joy as equity markets and risk assets rallied further. The BoJ intervened in the FX market to strengthen the Yen, which had a short-term effect on price, but will it hold?

In a notable move, the Pound outperformed following a stronger-than-expected UK GDP print, showcasing its strength as the Dollar falters. The Euro also gained almost across the board. EURGBP fell below 0.84 for the first time in a while and still looks bearish while below the critical 0.85 resistance level. Also, the EURUSD broke above 1.09 for the first time in over a month.

Commodity currencies should have done better, given the Dollar’s weakness and general market rally, but they underperformed severely. The CAD, AUD and NZD were within a +/- 0.5% range, and the NOK fell 1.7% following a weak Norway inflation print. Elsewhere in FX, the CHF was flat, and the USDJPY fell by 1.8% following the BoJ intervention.

Oil finally posted a negative week after a month of gains – last week, the WTI fell 1.4% to close at $82.14.

Precious metals were having a quiet week until the US CPI print, which caused them to shoot higher initially. However, they were met with severe selling pressure once again as shorts tried to make every breakout a technical failure. In the end, there was some success for sellers, but metals still look very strong overall. Last week, Gold closed 0.8% higher at $2,410, and Silver was 1.4% lower at $30.78.

Bonds had a second intense week in a row, following the disappointing inflation numbers and seeing yields drop. Last week, the 10-year UST yield fell 9bps to 4.19%, and the 10-year Bund rallied 0.6% to close at 131.796 points.

Equities continued their upward trend for another week. As we cautioned last week, shorts should be careful, and the market confirmed this need. The path of least resistance for equity indices remains upward, but we may be approaching a medium-term peak. It’s crucial to note that until there is technical evidence of a peak, shorting remains a risky proposition. Last week, the S&P500 index surged 1% to 5623, and the DAX gained 1.5% to close at 18748.

Finally, crypto-currencies breathed a sigh of relief after a disastrous month. The general risk euphoria and the attainment of important support levels are now making cryptos bounce across the board. At the time of writing, Bitcoin and Ethereum are up over 5% at $60,000 and $3,200, respectively.

The Week Ahead:

We wait to see the effects of the Trump assassination attempt on markets in a very data-heavy week ahead. We have inflation prints from Japan, Canada, New Zealand, the UK and the Eurozone. We also have the ECB interest rate decision (no change expected) and UK employment data.

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 or as an official confirmation of any transaction. 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.