Category: Weekly Market Recap

It was another week of risk-on moves as momentum continued higher following Donald Trump’s election victory. Equities continued their melt-up higher, and in FX, the US Dollar moved lower, and the Yen shot higher as the BoJ talked about potential rate hikes.

After a few weeks of continued strength, the US Dollar finally showed some weakness, even as US PCE and GDP met expectations. Have we seen a short-term top? It’s probably too early to say. Last week, the DXY index fell 1.6% and closed at 105.782.

The Euro did not lose ground last week even as German economic data continued to disappoint. The single currency gained 1.5% against the US Dollar, but it traded mostly sideways against the other majors.

Sterling also gained against the dollar but was broadly stable against other currencies. The UK economy is still looking fragile, and inflation is sticky, which will make the Bank of England’s job difficult in the short term.

The falling oil price did not faze commodity currencies, and they posted a positive week. The AUD, CAD, and NOK rose slightly vs. the Dollar, while the NZD rallied 1.5% despite the 50bp RBNZ rate cut. Elsewhere in FX, the CHF gained 1.4%, and the JPY was the week’s big winner with a 3.2% rally.

Crude Oil reversed most of last week’s gains and is entering the critical support zone again. Last week, the WTI fell over 4% to $68.11.

As we predicted last week, precious metals are not out of the woods yet. A medium-term bottom is not in yet, as markets remain vulnerable. Last week, Gold and Silver fell over 2%, closing at $2,650 and $30.62, respectively.

Bonds may have seen a bottom for now, as buying pressures were intense. Last week, the 10-year UST yield fell 23bps to close at 4.18%, and the 10-yearBund rallied 1.4% to close at 134.868.

Equities are still not showing any technical evidence that the move higher is close to an end. Shorts keep getting stopped out, and the path of least resistance remains higher for now. Last week, the S&P500 index rallied 1.1% to 6039, and the DAX rallied 1.6% to close at 19626 points.

Finally, crypto-currencies are still trading very well. Bitcoin is fighting with the magical $100,000 level, and at the time of writing, it hasn’t been able to break higher. As things stand, Bitcoin is down 1.5% at $97,000, and Ethereum is up nearly 9% at $3,700.

The Week Ahead:

The Trump trade momentum is still strong, pushing equities higher and cryptos even higher—but how long will this last? There is still no technical evidence of a top, but we are surely getting very close to it. Data-wise, we have a wide range of PMIs and GDP readings from Australia and the Eurozone, and we close the week with the all-important US Nonfarm Payrolls.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

The Trump trade is alive and well, and we continued the moves of recent weeks. The US Dollar wrecking ball remained the main feature, pushing risk assets higher. PMIs disappointed in the UK and the Eurozone, with the single currency plunging further as the ECB is expected to deliver more rate cuts.

The US Dollaris still king of the major currencies, and its strong run continues for yet another week. Last week, the DXY index rallied 0.8% to close at 107.491.

The Euro remains vulnerable, hampered by continued disappointing Eurozone economic data. Last week, the EURUSD traded below 1.04 for the first time since 2022, ultimately closing 1.2% lower at 1.0415.

Sterling moved lower for the second week in a row. UK PMIs came in soft, while CPI was 0.1% higher than expected at 2.3% YoY, which is not what the BoE wants to see. Last week, the GBPUSD fell 0.7% to close at 1.2523, but it now lies at important trendline support.

Commodity currencies had a mixed week, as higher oil prices cushioned the fall caused by the strong Dollar. Last week the NZD and CAD were around 0.5% lower, the NOK was unchanged, while the AUD was up around 0.5%. Elsewhere in FX, the JPYand CHFwere up around 0.5% against the greenback.

Oil bounced back strongly from the support zone we mentioned in last week’s newsletter. It still remains in a range, exhibiting elevated weekly volatility. Last week, WTI rallied over 6% to close at $71.12.

Precious metals also regained all of the previous week’s losses, and some pundits quickly declared that their post-election correction lower is over. We think we shouldn’t be hasty; their medium-term direction should be a lot higher, but the short-term damage is likely not over yet. Last week, Gold rallied 6% to $2,716, and Silver gained 3.6% to close at $31.34.

Bonds had a quiet week for a change, as markets realised we are now pricing very little in terms of further monetary easing by the world’s major central banks. Last week, the 10-year UST yield was 3bp lower at 4.41%, and the 10-year Bund rallied 0.6% to close at 133.037.

Equities confirmed what we said last week: there is still no bearish technical evidence for a sustained move lower. Most major indices bounced back after the previous week’s negative move, showing more resilience. Last week, the S&P500 index rallied 1.6% to close at 5974 points, and the DAX rose 0.6% to 19322.

Finally, crypto-currencies are unstoppable, as crypto fans consider this administration the best thing ever happening to the sector. But what can we expect shortly? This market has become too frothy now, and the risk for a proper correction lower is looming large. Bulls should be cautious! At the time of writing, Bitcoin and Ethereum are up around 8% at $98,500 and $3,400 respectively.

The Week Ahead:

There has been much jubilation and anticipation following the Trump win, and we fear we are now getting very close to the point where the markets have gotten way ahead. After all, if Trump does reduce the deficit and cut government spending as planned, this would be very negative for employment and risk assets in the short term – such policies should be deflationary, in theory. For now, markets are buoyant and complacent, and this is always a dangerous environment.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

The US Dollar continued its powerful move higher last week, along with yields, but this time, equity markets lagged behind. US CPI (both headline and Core) came in line with expectations, unchanged from the previous month, showing that inflation pressures may have abated, but they are not at the Fed’s target yet.

The US Dollarwas once again the king of currencies, continuing its impressive rally. Markets are now pricing much less easing by the Fed in the coming months, but will this materialise? Powell keeps reminding everyone that the US economy and labour market are doing well, but in reality, things could be much more delicate. Last week, the DXY index rallied 1.6% to close at 106.673.

Mediocre German economic data are still holding back the Euro, and there are few signs that the Eurozone is ready to drive forward in terms of growth and economic activity. Last week, the EURUSD fell 1.7% to 1.0538, reaching levels not seen since late 2023.

Sterling moved lower across the board as the UK economy continued to disappoint, with GDP now only marginally positive.

Commodity currencies quickly forgot about last week’s rally and resumed their fall—making it 6 out of 7 weekly losses; the rallying USD and falling oil price were too strong a driver. Last week, the NOK fell 0.8%, the CAD dropped 1.3%, and the AUD and CAD both fell nearly 2% against the Dollar. Elsewhere in FX, the JPY and CHF fell around 1%.

Oilhad a bad week and is showing continued weakness. We are now within a major support zone that, if broken, could target the $40-$50 range. Last week, the WTI fell 5%, closing at $66.91.

Precious metals remain firmly in corrective mode following Trump’s election win. Sentiment has changed significantly within a couple of weeks, as optimistic calls for $5000 Gold and $50 Silver have been silenced. This healthy corrective move lower will most likely be followed by another thrust higher. Last week, Gold fell 4.5% to $2,563, and Silver dropped 3.4% to close at $30.25.

Bonds moved lower once again as the general “higher inflation for longer” narrative remained dominant. Last week, the 10-year UST yield rose 13bps to close at 4.44%, and the 10-yearBund was broadly flat at 132.272.

Equities finally showed some weakness as yields and the USD rallied – but will this last? There is no bearish technical evidence yet, so the path of least resistance is likely higher still. Last week, the S&P500 index fell 2% to close at 5881, and the DAX was flat at 19211 points.

Finally, crypto-currencies remain in monster bull mode! The markets are optimistic about Trump’s pro-crypto policy, but what exactly are they expecting? A strategic Bitcoin reserve has been frequently mentioned, but cryptos will be vulnerable if this doesn’t materialise. For now, longs are firmly still in control. At the time of writing, Bitcoin is nearly 20% higher at $90,700, and Ethereum is up 4% at $3,150.

The Week Ahead:

The Trump trade momentum remains strong, and next week, our focus will be on equity indices – will they be able to regain their bullish momentum, or will we have a second negative week in a row? We have inflation readings from the Eurozone, Canada, and the UK, as well as broad PMI data.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

What a week! It was supposed to be a tight race for the US elections, but Donald Trump crushed it. Ultimately, it was no contest, with Trump winning most swing states and registering a landslide win. The markets greeted this result with optimism, with the US Dollar and US equities rallying strongly. The Federal Reserve but 25bps as expected, with Powell’s commentary bringing no new information or direction.

The US Dollar was one-way traffic throughout the week, anticipating strong policies and deficit reduction from the President, with Elon Musk’s help – but will these hopes materialise? Last week, the DXY index rose by 0.6% to close at 104.951.

The Euro retreated last week as markets contemplate whether the upcoming Trump policies will be negative for Eurozone trade. The single currency fell over 1% against the USD, the GBP, the JPY, the AUD, and the NZD.

The British Pound had a forgettable week. The BoE cut the expected 25bps, and economic data did not surprise.

Commodity currencies finally stopped their five-week fall, even though one would have guessed that a Trump win would have been negative for them. Last week, the AUD, NZD, and CAD all rallied marginally, while the NOK gained 0.6% against the Dollar. Elsewhere in FX, the JPY posted a slight gain, and the CHF fell 0.7%.

Oil is still trading within the broad range, with weekly swings in both directions. Last week the WTI rallied 1.6% to close at $70.38.

Precious metals continued their correction after their strong move higher. The Trump election win theoretically is good for the geopolitical environment, but it’s negative for Gold. Last week, Gold fell 1.9% to close at $2,684, and Silver dropped 3.5% to $31.307.

Bonds finally stopped their recent fall, having reached attractive yield levels. It’s worth noting that positioning is once again very short, and this could pave the way for another powerful short squeeze; shorts should be very careful! Last week, the 10-year UST yield fell 7bps to 4.31%, and the 10-yearBund rallied 0.6% to close at 132.288.

Equities, particularly US indices, greeted the election win with great optimism. Last week, the S&P500 index broke the 6k barrier for the first time and closed 4.6% higher at 6002, while the DAX was broadly flat at 19215 points.

Finally, crypto-currencies shot higher as Donald Trump has been openly very crypto-friendly. He has suggested a strategic Bitcoin reserve, but is this optimism premature? Time will tell. For now, cryptos are registering substantial gains, and spirits are high. At the time of writing, Bitcoin was 10% higher at $76,500, and Ethereum was up over 20% at $3,030.

The Week Ahead:

The week ahead should continue broadly like last week, with optimism dominating market psychology. As the 6000 mark has been broken in the S&P500, the road to higher levels should likely be straightforward. Data-wise, we have US CPI this week, and it’s probably the biggest risk for markets in the coming days. We also have inflation readings from Germany, Norway, and Japan, as well as US Retail Sales and the Banxico interest rate decision.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

The time has come! The US elections occur this week, and the latest polls have Trump and Harris running very close. Yields have continued their recent bounce, but deteriorating economic data could mean we are very close to the top.

The US Dollarspent much of last week on the back foot, but it managed to close the week broadly unchanged even though NFPs disappointed. Last week, the DXY index closed flat at 104.317.

The Euro performed well following better-than-improved Eurozone GDP and CPI numbers. Last week, the single currency posted some modest gains against the USD and GDP, as well as most of the other majors.

The British Pound had a forgettable week without major economic data, moving broadly sideways.

Commodity currencies had a fifth consecutive negative week as oil fell and the Dollar rallied. Commodities, in general, have been underperforming and are oversold, so chances are that we can have a snap rally after the US elections. Last week, the AUD, NZD, CAD, and NOK all fell between 0.2% and 0.8% against the Dollar. Elsewhere in FX, the CHF and JPY posted slight losses.

Oil continued its recent move lower as a Middle East escalation didn’t materialise. Last week, the WTI fell 3.3% to close at $69.29.

Precious metals are correcting for a second week, following their recent breakout higher. This is expected before another leg goes to the upside. We should expect metals to perform very well in the event of a Harris election win. Last week, Gold fell 0.4% to close at $2,736, and Silver dropped 3.8% to close at $32.45.

Bonds fell further as markets worldwide worried about higher inflation for longer. Yields are now a bit overstretched and heading towards resistance, so it’s likely that we will see a fall after the elections. Last week, the 10-year UST yield rose 14bps to close at 4.38%, and the 10-year Bund fell 1% to 131.528 points.

Equities had a second negative week in a row as markets worried about rising yields. Last week, the S&P500 and the DAX both fell over 1% to close at 5736 and 19255 points, respectively.

Finally, despite the risk-off move, crypto-currencies performed better than expected last week. It’s worth remembering that a Trump presidency will be very crypto-friendly, while a Harris administration will be the exact opposite. At the time of writing, Bitcoin is nearly 4% higher at $69,600, and Ethereum is up 1% at $2,510.

The Week Ahead:

It’s all about the US presidential elections next week. For the first time in many years, there seems to be a very different anticipated reaction to a Republican or Democrat win. The latest polls show that Trump and Harris are running extremely close, so markets will move after the result! Data-wise, we also have interest rate decisions from the FOMC, the BoE, the RBA and Norges Bank.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

There is just over one week to go until the much-anticipated US elections, and polls have Trump firmly in the lead. However, it’s likely that the result will be a very close one!

The US Dollarhad yet another positive week, taking out more shorts in what had been a very crowded trade in the second half of 2024. Last week, the DXY index rose 0.8% to close at 104.317.

The Euro and Sterling lost ground against the Dollar but were otherwise quiet, as Eurozone and UK PMIs disappointed somewhat.

Commodity currencies had a fourth negative week in a row as the Dollar continued its ascent, and even an Oil rally didn’t manage to bring any strength. Last week, the AUD and NZD fell 1.5%, while the CAD and NOK retreated by around 0.5%. Elsewhere in FX, the CHF posted a slight loss against the Greenback, and the JPY was the week’s worst performer with a 2% drop.

Oil remains highly volatile. It’s still dragged one way by the Middle East situation and the other by a vulnerable global economic environment. Last week, WTI rallied 4% to close at $71.62.

Precious metals corrected lower for most of the week (following the previous week’s monster performance), but in the end they found support and closed on a strong note. Last week Silver finished flat at $33.72, and Gold gained 0.9% to close at $2,747.

Bonds continued their downward trend, with markets worried about the re-emergence of inflation. Last week, the 10-year UST yield rose 15bps to 4.24%, and the 10-yearBund fell 1% to close at 132.817.

Equities had what feels like a rare negative week, pressured by higher yields and a stronger Dollar. The S&P500 index and the DAX both fell around 1% to close at 5811 and 19464 points, respectively.

Finally, crypto-currencies are still well correlated with risk, and this should be very worrying for crypto maximalists who consider them to be a completely independent & diversified asset class. At the time of writing, Bitcoin is 2% lower at $67,000, and Ethereum is 6% lower at $2,480.

The Week Ahead:

It will be an exciting nine days until the US elections, with markets seesawing and the result very difficult to predict. A Harris win should bring weakness to the Dollar and a risk rally, while a Trump win should be met with more caution by the markets. Data-wise, it’s a very busy week! We have the BoJ interest rate decision and GDP readings from the US and the Eurozone. Finally, we close the week with US ADP and NFP employment data, which are typically big market movers.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

Another volatile week has passed, with plenty to talk about! There was no further escalation in the Middle East, which caused oil to move lower. The ECB cut 25bps as expected, with Lagarde striking a dovish tone once again. CPI releases disappointed in the UK, the Eurozone, and Canada, while US retail sales beat expectations. Finally, precious metals stormed higher, with Gold hitting new ATHs and Silver breaking above important resistance.

The US Dollarrose against most majors due to USD strength and other currency weakness. Last week, the DXY index rose 0.5% to close at 103.463, but momentum seems to be slowing.

The Euro retreated marginally following the ECB 25bp cut and Christine Lagarde’s continued dovish tone.

The British Pound advanced slightly, with economic data remaining very mixed (low CPI and high Retail Sales).

Commodity currencies had a third negative week as oil traded poorly and the Dollar rallied. Last week, the CAD fell 0.3%, the AUD and NZD shed 0.6%, and the worst performer was the NOK with a 2% drop. Elsewhere in FX, the JPY posted marginal losses, and the CHF fell by 0.9%.

Oil finally gave up most of its recent gains in the absence of Middle East escalation. However, oil remains very volatile and prone to big headline-induced moves, so it needs to be traded with extra caution. Last week, WTI fell nearly 9% to close at $68.78.

Precious metals were firmly focused last week as gold and silver made new highs. Gold rallied 2.4% to close at $2,722, anticipating more currency devaluation due to the ever-increasing government debt. Silver rallied nearly 7% to close at $33.71, taking out the previous high at $32.75 and looking unstoppable for now.

Bonds ended two weeks of losses with a marginally positive one. Last week, the 10-year UST yield fell 1bp to 4.09%, and the 10-year Bund rallied 0.6% to close at 134.107 points.

Equities just don’t seem to have any reason to move lower, and the path of least resistance remains to the upside. Last week, the S&P500 index rallied 1% to close at 5873, and the DAX gained 1.4% to close at 19657 points.

Finally, crypto-currencies retained their correlation with risk, and they push further higher whenever Trump seems to gain ground in the upcoming US elections. At the time of writing, Bitcoin is up 8% at $68,300, and Ethereum is 7% higher at $2,640.

The Week Ahead:

As we approach the US elections, markets are bound to become more edgy and volatile. All eyes will also be on the Middle East situation, hoping for no further escalation. Data-wise, we have a wide range of PMIs and US durable goods orders on Friday.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

Last week was relatively quiet and event-free despite the recent escalation in the Middle East. There was no further retaliation from either side, and equity markets moved broadly higher. US CPI and Core CPI both came in 0.1% higher than expected YoY, which strengthened the Dollar and Yields. Meanwhile, the Chinese government is trying hard to provide more accommodative policies and boost the economy.

The US Dollar continued to rise following the previous week’s surge, but momentum is waning. Last week, the DXY index gained 0.4% to close at 102.915.

Sterling and Euro showed little movement last week, as UK and Eurozone economic data remain very mixed. The ECB is expected to cut rates further next week, but the single currency remains relatively stable for now.

Commodity currencies had a second negative week as yields rose and the Dollar increased. The RBNZ cut rates by 50bps as expected. Last week, the AUD, NZD, CAD and NOK fell between 0.5% and 1% against the greenback. Elsewhere in FX, the JPY posted a marginal loss while the CHF was flat.

Crude Oil continued to rally as Middle East tensions remained despite no further escalation. Last week, the WTI gained 1.4% to close at $75.44, and resistance is still a long way away at around $80.

Precious metals traded quite differently last week, with Gold still reigning supreme. Despite rising yields and a stronger Dollar, Gold closed the week flat at $2,657. On the other hand, Silver showed weakness and fell 2% to close at $31.53.

Bonds had a second week of losses, which started with the firm US NFP number and continued with the slightly hotter-than-expected US CPI. Last week, the 10y UST yield rose 13bps to close at 4.10%, and the 10y Bund fell 0.5% to close at 133.297.

Equities – once again – were in “rally only” mode. A hotter US CPI and rising yields didn’t manage to cause any damage, and equity markets continued to rise. Last week, the S&P500 index rallied 1.1% to 5815 (hitting new all-time highs), and the DAXgained 1.3% to close at 19377 points.

Finally, crypto-currencies continued to follow risk assets closely. At the time of writing, Bitcoin and Ethereum are 1.5% higher at $62,900 and $2,465 respectively.

The Week Ahead:

Markets remain buoyant, but the risk of Middle East escalation remains, and it could move them sharply lower. We also need to see how the markets react to yet more Chinese easing and measures.

Data-wise, it’s a relatively busy week with inflation releases from Canada, New Zealand, Japan, the UK, and the Eurozone. We also have the ECB interest rate decision, with an expected 25bp cut.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

It was a relatively quiet week, with the primary market mover being the rising tensions in the Middle East. However, Friday’s US data put a spanner in the works! Nonfarm Payrolls beat all expectations, while Average Hourly Earnings and Unemployment beat expectations. As a result, both the US Dollar and yields shot higher and closed the week on a high.

It’s worth noting that most of the NFP gains were in government and healthcare, while private payrolls contracted again. Furthermore, the number of multiple jobholders rose to a new record. Is this a positive sign?

The US Dollarfinally bounced strongly higher, aided by strong US data. The greenback was always going to have a counter-trend rally, and last week may well have been that—the DXY index rose over 2% to close at 102.487.

The British Pound had a forgettable week (apart from the drop vs the USD) as UK economic data remained mixed.

The Euro also fell against the Greenback but was relatively quiet against the other majors. Eurozone inflation and unemployment aligned with expectations, and there was little to move the single currency.

Commodity currencies reversed last week’s gains as the Dollar powered forward. The CAD was the best performer with a 0.5% loss, the AUD and NOK fell 1.5%, and the NZD dropped almost 3% lower. Elsewhere in FX, the CHF fell 2%, and the JPY collapsed over 4.5%.

Oil naturally rallied strongly following the Middle East tensions, anticipating further escalation. Last week, the WTI rose 8.5%, closing at $74.39.

Precious metals were resilient despite rising yields and a strong Dollar. Last week, Gold was flat at $2,654, and Silver outperformed by a 1.8% rally to $32.20.

Bonds were grinding lower for most of the week and collapsed after Friday’s US data. Last week, the 10y UST yield rose 22bps to close at 3.97%, and the 10y Bund fell 0.8% at 133.931 points.

Equities seem to still be in “rally only” mode. If economic data is weak, the expected central bank easing moves them higher. If economic data is strong, the expected economic growth gives them support. So, under what scenario do they move lower? For now, there seems to be no such scenario. Last week, the S&P500 index rallied marginally to close at 5754 points, and the DAX fell 1.8% to 19120 points.

Finally, crypto-currencies proved again last week that they are a good risk proxy. As Middle East tensions escalated and equities fell, cryptos fell considerably more. At the time of writing, Bitcoin is 5.5% lower at $62,000, and Ethereum is 9% lower at $2,430.

The Week Ahead:

We will closely monitor the Middle East situation as the markets continue to digest Friday’s US economic data. We are also only weeks away from the US elections, with the results way too close to call.

Data-wise, we have the RBNZ interest rate decision—expected to cut rates—and CPI and PPI data from the US.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.

We said last week that the risk and equities rally could likely continue, and that’s exactly what transpired. Economic data from around the world remained soft; the SNB cut rates and more easing got prices from the world’s major central banks. As a result, with no recession (yet) in the US, markets remain strong in the short term.

The US Dollartraded on the back foot throughout the week but stayed above big support levels. Last week, the DXY index fell 0.3% and closed at 100.417.

The British Pound posted gains against the USD and EUR but fell against commodity currencies. UK economic data continues to be mixed; the PMIs were lower than expected last week.

The Euro moved lower last week as soft economic data remains weak in the Eurozone. The only major Euro pair that remained flat was EURUSD, which closed at 1.116.

Commodity currencies had a good week overall, following risk higher even though oil retreated. The AUD and NZD rallied roughly 1.5%, the CAD gained 0.4%, and the NOK lagged with a sideways week. Elsewhere in FX, the JPY and CHF rallied 1.2%.

Oil dropped hard as the Saudis seem to have abandoned their $100 target and are said to be raising production soon. Last week, the WTI fell 3.7% to close at $68.57.

Precious metals rallied for the third week in a row despite a correction lower on Friday. Monetary easing is usually a tailwind for metals, and sentiment remains strong. Last week, gold and silver rallied 1.4% to close at $2,658 and $31.62, respectively.

Bonds still aren’t showing much movement following the FOMC 50bp cut. Last week, the 10y UST yield rose 1bp to close at 3.75%, and the 10y Bund rallied 0.6% to close at 134.973.

Equities continued where they left off following the Fed 50bp cut, showing more strength. Last week, the S&P500 index rallied 0.6% to 5,743 points, while the DAX rocketed 4% higher to close at 19,473.

Finally, crypto-currencies remained correlated with risk and posted yet another strong week. At the time of writing, Bitcoin and Ethereum are roughly 4% higher at $65,600 and $2,670 respectively.

The Week Ahead:

Markets in the week ahead could continue the past two weeks, absent any major surprise events. With the world’s central banks now in easing mode, risk assets should remain bid, and yields and the Dollar could see more weakness. Data-wise, it’s relatively quiet in the first half of the week, but we close with the usual US ADP and NFP releases.

Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation to purchase or sell 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.