Last week was another continuation of recent trends, especially regarding equity indices. The path of least resistance remains to the upside, frustrating shorts yet again. The much-anticipated US Core PCE met expectations and remains in a slow downward trend.

The US Dollar had another quiet week. Bulls call this a consolidation before marching higher and bears rejoice in its inability to break above resistance. Which camp will turn out to be correct? Last week, the DXY index fell marginally to close at 103.885.

The Euro and the Pound also lacked any excitement, with the single currency performing slightly better as Eurozone CPI came in at 2.6% YoY, 0.1% higher than expected.

Commodity currencies underperformed last week, failing to take advantage of a sleepy Dollar and the rising oil price. The NOK ended the week flat, the CAD fell 0.4%, the AUD slipped 0.6%, and the NZD was the worst performer with a 1.5% drop against the Dollar. Elsewhere in FX things were pretty quiet, with the CHF dropping 0.3%, the JPY gaining 0.3%.

Oil is still very tough to trade, with greatly elevated weekly moves. Last week, the WTI rallied over 4% and closed shy of $80 resistance.

Precious metals were having a quiet week, but they found some strength after the Friday US data miss. Gold closed the week 2.3% higher at $2,082, which seems to have built a solid base at $2,000. Silver continued to underperform Gold, with a 0.8% rally and closing at $23.12.

Equities remain strong, but what’s even more impressive is that dips are very shallow and short-lived. The pain trade remains to the upside until we see some proper technical evidence of the contrary. Last week the S&P500 index rallied 0.9% to close at 5132 points and the DAX gained 1.8% to close at 17735.

Bonds have been trying to break support but are still failing. The 10y US yield has repeatedly attempted to break above the 4.30-4.35% range but has always been rejected. Last week, it closed 7bps lower at 4.18%, and the 10y Bund posted marginal losses to close at 132.747.

Finally, crypto-currencies flew higher after a few weeks of consolidation. Interest (and money inflows) into cryptos rose sharply, and it was a glorious week for longs. The only problem now is that everyone expected them to go a lot higher from here. At the time of writing Bitcoin is 20% higher at $62,000 and Ethereum is 14% higher at $3,420.

The Week Ahead:

We will unlikely see a quiet week ahead as markets remain very lively. Equity indices march on, as do cryptos, but what can catalyse a reversal? Perhaps the Nonfarm Payrolls and Earnings data on Friday?

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 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.