Another lively week came to a close, and some of the main trends of the past months continued. Equity markets have still increased but are now showing signs of fatigue. The SNB surprised by cutting rates again, while the Bank of England and the RBA kept rates on hold.

The US Dollar consolidated the previous week’s gains and managed to edge higher. US data remains very mixed, which is a headwind for the greenback. Last week, the DXY index rose 0.3% to close at 105.832.

The Pound and the Euro moved broadly sideways last week, as the CPI came in at 2.0% for the UK and 2.6% for the Eurozone, as expected.

Commodity currencies had mixed performance – the NZD fell 0.4%, the AUD and CAD rose around 0.3%, and the NOK was the week’s winner with a 1% rally against the Dollar. Elsewhere in FX, the CHF fell 0.5%, and the JPY fell 1.5%.

Oil had a second strong week in a row, but it remains within the broad trading range of the past months. Last week, the WTI rose by 2.7%, closing at $80.52.

Precious metals were having a good week until Friday when the release of better-than-expected US PMI numbers sparked some aggressive selling. This led to an attempt to break key technical levels to the downside. However, these efforts will most likely be unsuccessful, and the metals could move strongly to the upside once again. Last week, Gold was marginally lower at $2,322, and Silver was flat at $29.55.

Bonds took a breather after a few solid weeks and traded mostly sideways. Last week, the 10y UST yield rose 3bps to 4.26%, and the 10y Bund fell 0.3% to close at 132.588.

Equities moved higher yet again, frustrating bears once more. The path of least resistance has been to the upside for months, but positioning now looks very bullish. Could a major top be close? That’s quite a likely scenario. Last week, the S&P500 index and the DAX rose 0.9% to close at 5480 and 18163 points, respectively.

Finally, crypto-currencies had another negative week, even as risk assets rallied. This underperformance is evident for now and frustrates bulls. At the time of writing, Bitcoin was down 3% at $64,400, and Ethereum was down 1% at $3,485.

The Week Ahead:

Another data-heavy week awaits, and volatility should remain elevated. We have US GDP and Core PCE data and inflation readings from Canada.

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