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The U.S. Dollar showed little volatility throughout last week, with the USDX ending 0.37% higher on the weekly chart, still right below its 11-month high of 107.064. The moderate increase in the dollar value could be attributed to risk sentiment taking a hit by weak performance in Wall Street, however, the US currency remains supported by rising treasury yields as well as solid economic data indicating an increase in consumer spending above expectations and an elevated inflation report. According to the CME Group Fed Watch Tool, the possibility that rates will remain unchanged in November is at 96.1% while for December chances are at 72.9%, and there is also a 2.9% chance for a rate cut in December.
Cryptos are seen gaining more and more momentum lately, with the Bitcoin adding 13.94% to its value in the last week, currently trading above the $34K mark while Ethereum added 9% for the week, flirting once again with the $1800 mark. The overall crypto market cap remains elevated at around 1.306 trillion as seen early on Monday.
Gold prices continue to ascend, rising by another 1.39% last week and crossing above the $2,000 per ounce mark. This comes in the midst of the Israel-Hamas war, with the situation seeing a gradual escalation as the Israel ground assault has somewhat begun.
The main stock market indices in the U.S. fell sharply last week, with the US 500 declining by 2.58%, the US 30 down by 2.23% while the US tech 100 lost 2.68% of its value, pressured by a drop in tech giant Alphabet after several mega-cap companies, missed their revenue estimates thus edging lower while U.S. Treasury yields remain elevated.
For Monday, some price action could be seen upon the release of inflation data from Germany and Spain as well as earnings reports from companies Texas Instruments, McDonald's, Check Point, SoFi, Chegg, Pinterest and ZoomInfo.
In the week ahead, the focus turns to key interest rate decisions from the Bank of Japan, the Federal Reserve and the Bank of England, as well as some fundamental readings from China and the U.S. On the earnings front, markets will be looking forward to Apple’s earnings which are also due later this week.
The EUR/USD pair traded between gains and losses last week and ended near the mark of 1.0570, posting losses of 0.21%.
The Core US Personal Consumption Expenditure (PCE) Index came in at expectations, with the Federal Reserve's (Fed) preferred method of measuring inflation printing at 3.7% for the year into September, compared to August's print of 3.8%, which was revised down from 3.9%.
Investors will be looking ahead to this week which sees EU Harmonized Index of Consumer Prices (HICP) and EU Gross Domestic Product (GDP) on Tuesday, with another rate call from the Fed slated for Wednesday.
Gold vaulted over $2,000 on its way to a third straight weekly gain on Friday, as an escalation in the Israel-Hamas conflict fuelled safe-haven buying, while investors awaited the U.S. Federal Reserve policy meeting this week.
Trading volumes spiked after Israel’s chief military spokesperson said its air and ground forces are stepping up operations in the Gaza Strip. Safe-haven bullion has gained around 8%, or more than $140, since the start of the war on Oct. 7.
Oil prices climbed on Friday ending the day 1.79% higher on worries that tensions in Israel and Gaza could spread into a wider conflict that could disrupt global crude supplies. For the week the WTI contract posted losses of 3.44% on the iFOREX platform.
Middle East developments have so far not directly affected oil supplies, but many fear disruptions of exports from major crude producer and Hamas backer Iran and others. Oil ended one of its most volatile weeks as traders raced from one headline to another on the Middle East conflict that brought warring parties Israel and Hamas no closer to a solution despite intense mediation by the United States and other global powers.
U.S. stocks closed mostly lower on Friday, losing momentum as investors digested a hectic week of mixed earnings, and economic data that seemed to support the "higher for longer" interest rate scenario.
All three main indexes ended last week on negative with US 500 and US 30 ending the week with losses of 2.58% and 2.24% respectively while US Tech 100 posted losses of 2.68%.
On the earnings front, companies including McDonald’s Corporation, Advanced Micro Devices Inc, Apple Inc, PayPal Holdings Inc and Starbucks Corporation are scheduled to report quarterly results.
Ahead in the week, investors will closely monitor CB consumer confidence, ADP nonfarm employment change, ISM manufacturing PMI, JOLTs job openings, the Fed's interest rate decision and statement, factory orders, average hourly earnings, and nonfarm payrolls.
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