It was another week of important data, with a renewed focus on US inflation, GDP and payrolls. Overall, the figures were mixed, leading to further uncertainty in the market about the Federal Reserve’s interest rate path.

The US dollar traded weak for most of the week but managed to recoup losses late Friday with the better-than-expected US PMI data. The DXY index ended the week 0.1% higher at 104.263.

The Euro showed another weak showing after German economic data continued to surprise negatively.

Sterling continued to consolidate sideways in the absence of significant news, with minimal movement against the other Majors.

Commodity currencies managed to break a 4-week losing streak, but they did not gain much ground. A strong dollar is holding back any advance for now. Last week, AUD and NZD rose just over 0.5%, while CAD and NOK were generally unchanged. Elsewhere in FX, the JPY and CHF remained flat.

Oil had a monster week, reversing losses from the previous two weeks. Last week, the WTI index rose 7.5% and closed at $85.98.

Precious metals continued their recent strong form, which would have been even stronger without Friday’s US PMI data late. Last week, gold rose 1.4% to $1,940 and silver remained flat at $24.18.

Equities had a second positive week in a row as yields fell further. The S&P500 index rose 2.4% and closed at 4,511 points and the DAX gained 1.1% and closed at 15,682 points.

Bonds traded very strongly for most of the week but gave back some of their gains following Friday’s US Purchasing Managers’ Index (PMIs). Last week, the yield on the 10y UST fell 7bps to 4.17% and the 10y Bund remained virtually unchanged at 132.278 points.

Finally, cryptocurrencies saw volatility following the SEC’s decision on ETFs and ended the week unchanged. At the time of writing, Bitcoin is trading at $25,900 and Ethereum at $1,640.

The week ahead:

There is still conflicting economic data in the US and markets are eagerly awaiting more data points to decide on the future interest rate path. Next week, we will get more PMIs, as well as interest rate decisions from the Bank of Canada and the RBA.

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 to completeness or accuracy 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.