Markets were volatile, and risk-off tilted for much of the week amid geopolitical uncertainty (Middle East tensions), sticky inflation data (higher-than-expected U.S. PPI), and renewed tariff speculation from the U.S., leading to cautious FX and equity trading. Gold and safe havens saw strong interest.
US Dollar Index (DXY)
The DXY ended the week marginally softer but remained resilient, with some bouts of strength mid-week following hotter inflation data. The USD was modestly stronger vs JPY but slightly weaker vs EUR, GBP, and CHF over the week.
Euro (EUR)
EUR/USD was generally supported and tracked higher mid-week, rising into Friday after dips earlier on data and risk sentiment. Mixed Eurozone inflation components and moderate growth data kept a cautious but constructive tone. Technical positioning shows EUR near key levels, with support around major ranges — markets watching if potential reversal holds. Euro held firm through the week, outpacing USD modestly but still battered by broader cautious sentiment.
British Pound (GBP)
Sterling underperformed peers, with GBP hitting a year-to-date low versus the EUR amid UK political uncertainty and weak by-election results. Domestic politics, rather than macro alone, weighed heavily on GBP. GBP/USD struggled to gain sustained upside and ended the week around or slightly below where it started. Weakest major among G10 this week, pressured by local political risk and risk-off FX flows.
Swiss Franc (CHF)
The franc acted as a safe haven, strengthening relative to risk currencies — particularly against commodity FX — and tracked firmer against the dollar by week-end. CHF strength reflected its traditional role amid risk aversion and geopolitical risk. Swiss economic data were relatively muted, but FX flows were dominated by risk sentiment.
Commodity Currencies (AUD, NZD, CAD)
AUD (Australian Dollar)
AUD was relatively strong among commodity FX, as markets repriced hawkish RBA expectations and a stronger Chinese yuan supported sentiment.
NZD (New Zealand Dollar)
Followed AUD’s lead with modest gains, though less dramatic; global risk tone and China influence were key drivers.
CAD (Canadian Dollar)
CAD was relatively stable but range-bound, with oil prices supported by geopolitical risk, which provided some underpinning.
Crude Oil
Crude prices climbed sharply through the week, supported by rising geopolitical tensions following stalled U.S.–Iran nuclear talks and escalating conflict in the region. WTI crude hit seven-month highs by Friday. Risk of supply disruption lifted energy sector shares. Geopolitical risk was the dominant driver, lifting oil and energy stocks.
Precious Metals
Gold and silver rallied on safe-haven demand amid intensifying geopolitical uncertainty and tariff/inflation concerns. Precious metals outperformed most other asset classes, with silver showing particularly strong momentum. Gold moved above key levels, reflecting investor flight to safety amid macro uncertainty.
Equities
U.S. stock markets finished weaker on the week. Major indices saw broad declines as AI sector worries, sticky inflation data (hotter PPI), and geopolitical risk weighed on sentiment. The Dow, S&P 500, and Nasdaq all closed lower, with tech names under particular pressure. Defensive sectors outperformed, and energy stocks benefited from rising oil. tock markets shifted into risk-off mode, with cyclical and growth sectors lagging.
Treasury Bonds
Treasury prices rallied, sending yields lower. The 10-year U.S. Treasury yield dipped toward the lowest levels in months, as investors sought safer assets amid market jitters. Bonds acted as a safe haven, with yields sliding as equities and risk assets softened.
Cryptocurrencies
Lastly, Crypto markets were generally soft and volatile. Bitcoin slipped toward the mid-$60k range and was down modestly on the week, with Ethereum also lower. Flows into Bitcoin and Ethereum ETF products helped temper declines, but crypto outflows continued in the broader monthly context. Crypto dropped in line with risk assets, showing sensitivity to macro volatility and risk-off sentiment.
Overall: The week was dominated by risk-off market dynamics — energy and safe-haven assets benefited, while equities and cryptocurrencies pulled back as inflation data, AI sector concerns, and geopolitical tensions shaped flows.
The Week Ahead:
Geopolitical Headlines
Anything that escalates or calms tensions in the Middle East will be the primary driver for crude oil, precious metals, equities, and safe assets.
Risk Sentiment vs Safe Havens
- Risk assets (stocks, crypto) will struggle in heightened uncertainty.
- Safe havens (gold, Treasuries) could continue to benefit if geopolitical risk persists.
Macro & Data Events to Watch
The following releases and themes could drive markets this week:
- PMI prints (US, Eurozone, Germany, UK) — early week flash on economic momentum.
- U.S. job data (Non-farm payrolls, unemployment claims, earnings) — key for Fed expectations.
- Final economic indicators and PMI revisions — may tweak global growth expectations.
Macro Data Impact
U.S. labour data and PMI readings could alter the market’s pricing of interest rate expectations and influence equity and bond markets.
Overall Outlook
- Early week risk-off bias: Elevated crude & gold, cautious equities, bond yields drifting lower.
- Mid-week clarity hinges on data: Key economic releases may determine if markets stabilise or remain volatile.
- Volatility remains elevated throughout the week.
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. 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 email or make any representations or warranties as to the accuracy and completeness of any information contained in this newsletter.
