Last week’s focus was on equity indices, looking for signs of stabilisation following the previous week’s strong sell-off. Global economic data remains mixed, and the US PCE inflation reading was flat, as expected.

The US Dollar continued to underperform, closing the week flat even as US equities retreated, and GDP came in stronger than expected. Last week, the DXY was flat at 104.327. All eyes are now on next week’s Nonfarm Payrolls number.

The Pound and the Euro moved in tandem again, remaining well-correlated in the past weeks. Eurozone PMIs came in weaker than expected again, and the market looks to the Bank of England’s interest rate decision next week for direction.

Commodity currencies had a third abysmal week in a row, as commodities suffered across the board. Last week, the CAD and NOK fell just under 1% against the dollar, while the AUD and NZD crashed by 2%. Elsewhere in FX, the CHF rallied 0.6% as flight-to-safety helped the Franc, and the JPY continued its recent short squeeze rally with a 2.3% gain.

Oil had another negative week in the general risk-off sentiment – last week, WTI fell nearly 3% to close at $76.41.

It was a tale of two halves for precious metals once again. Gold still reigns supreme with yet another very composed performance. On the other hand, silver had another major pounding, showing severe weakness during the illiquid Asian trading hours. It has now dropped 10% in two weeks and looks to be heading towards the original $26-$26.20 breakout level, which should be very good support. Last week, Gold fell 0.6% to close at $2,387, and Silver crashed 4.4% lower at $27.93.

Bonds rallied further last week – the 10y UST yield fell 5bps to close at 4.19%, and the 10y Bund rallied 0.5% to close at 132.668. Equities tried to find some support following the previous week’s sell-off, which was a mixed performance overall. The S&P500 index fell 0.8% to 5467 points, but the DAX rallied 1.3% to close at 18417 points.

Finally, crypto-currencies participated in the general market volatility last week. Like precious metals and Gold, Bitcoin proved resilient while others suffered. At the time of writing, Bitcoin was up 1% at $67,500, and Ethereum was nearly 8% lower at $3,230.

The Week Ahead:

Equities will attract all the attention next week, as bulls need to find some support around these levels if we are to avoid visiting much lower levels. Yields remain subdued and should help risk assets, but many economic data releases next week could wreak havoc. We have the Eurozone, Canada, Mexico’s GDP, US ADP, and NFP, and we also get interest rate decisions from the BoJ, BoE, and the Fed.

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