All eyes were on Jackson Hole and Jay Powell last week, and he didn’t disappoint! In an admittedly dovish speech, he essentially confirmed the September rate cut and left the door open for considerable easing if the US economic data disappoints. Risk assets rallied in response; overall, markets traded well last week.

The US Dollarfell further following Powell’s speech, breaking important support. Last week, the DXY index fell 1.7% to close at 100.677 and is now eyeing critical support at around 99.60.

The Pound had another excellent week, continuing its recent strong run, helped by some stronger-than-expected PMIs. The GBPUSD rallied over 2% to close above 1.32, and the EURGBP fell 0.6% to close well below the 0.85 level again.

The Euro didn’t find any strength last week, as Eurozone CPI came in at 2.6% as expected, and economic data was mixed. The single currency rallied against the USD last week but was frail against the other majors.

Commodity currencies had a fourth strong week in a row, making it a month of gains; the weakening Dollar and risk rally helped. Last week, the CAD rallied around 1%, the AUD and NOK gained 2%, and the NZD outperformed with a stellar 3% gain. Elsewhere in FX, the JPY and CHF rallied over 2% against the greenback.

Oil remains mixed and lacks direction. It exhibits high weekly volatility but no real course. Last week, the WTI fell 0.7% to close at $74.91.

Precious metals had another good week, with Gold hitting new intra-week ATHs and Silver outperforming for the second week. Technically, precious metals still look strong, and a buy-the-dip strategy will likely be the right one. Last week, Gold gained 0.2% to close at $2,512, and Silver rallied 2.7% to close at $29.83. It’s worth noting that Platinum underperformed once again, and it looks like it might be very close to a bottom on a ratio of gold and silver.

Bonds gained more ground as yet more rate cuts were priced into the yield curve. Last week, the 10-year UST yield fell 8bps to 3.81%, and the 10-yearBund rallied marginally to close at 134.453 points.

Equities naturally liked Powell’s dovish speech and posted another positive week. The path of least resistance remains to the upside, especially since many of these rallies are continuously met with short-sellers. Last week, the S&P500 index gained 1.4% to close at 5635 points, and the DAX rallied 1.7% to close at 18633. Both indices are within striking distance of their respective ATHs.

Finally, crypto-currencies managed to outperform for the first time in many weeks. The risk-on rally comprehensively lifted cryptos; Bitcoin was up over 7% at $64,000, and Ethereum was 5% higher at $2,750.

The Week Ahead: “Don’t Fight the Fed!” – Last week’s risk rally will likely continue for the following weeks, and shorts should be very careful. We have US CPI and GDP next week, and strong prints could temporarily put the brakes on the rally, but the big picture is still bullish for now.

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.