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.