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The U.S. dollar index (USDX) traded almost unchanged on Friday, ending the session 0.08% lower, close to the 105.7 mark. The dollar received some support, following Fed Chair Jerome Powell’s comments that officials "are not confident" with regards to interest rates being high enough to finish the battle with inflation. According to the CME Group Fed Watch Tool, the possibility that rates will remain unchanged in December remains at 91.2% on Monday, while there is a 8.8% chance for a rate hike.
The main US stock market indices painted a positive picture on Friday, with the US 500 ending the session 1.62% higher, the US 30 was up 1.14% and the US tech 100 posted gains of 2.40%. This move came following a 30-year treasury bond auction that disappointed the markets and caused yields to rise, however, the main tech and growth stocks kept prices supported while investors looked ahead to upcoming inflation data.
Cryptos have been on a sharp uptrend for the past 6 weeks, with Bitcoin up by more than 34% since the beginning of October, jumping from almost $27K to trade currently close to $37K and Ethereum up by more than 21% jumping from levels close to $1,670 to trade at approximately $2,055 early on Monday. The overall crypto market capitalization currently stands at 1.460 trillion dollars as of 08:15 AM GMT on Monday.
The main highlights for this week involve U.S. unemployment claims, monthly retail sales and a series of inflation related data including among others monthly and annual CPI and PPI. While the overall stance of central banks has recently shifted towards less aggressive monetary policy measures, global markets still pay close attention to these events to determine the path forward.
In other news, the U.S. Federal Budget Balance, a speech by FOMC Member Cook and the U.K. CB Leading Index are also included in today’s calendar while on the earnings front, XP and Lufax Holdings are due to release their quarterly reports.
The EUR/USD pair had a minor rebound on Friday ending the day 0.17% higher. The pair ended the week on the upside with total weekly gains of 1.53%.
European Central Bank (ECB) President Christine Lagarde avoided making any waves on Friday during a public appearance, and markets are still chewing developments after Federal Reserve (Fed) Chairman Jerome Powell came out with unexpectedly hawkish comments on Thursday.
Focus turns this week to EU gross Domestic product figures on Tuesday which will be followed by US consumer Price index inflation figures.
Gold fell more than 1% on Friday and posted a second straight weekly decline as safe-haven demand eased while the hawkish stance from Federal Reserve Chair Jerome Powell added to the downside.
U.S. Federal Reserve officials, including Powell, said on Thursday they are still not sure that interest rates are high enough to finish the battle with inflation. Benchmark 10-year U.S. Treasury yield and the dollar headed for weekly gains, making non-yielding gold less attractive for investors.
Oil prices gained about 2% on Friday as Iraq voiced support for OPEC+'s oil cuts ahead of a meeting in two weeks. The rebound on Friday did not manage to limit the weekly losses and the crude prices posted losses for a third consecutive week with WTI contract on iForex platform ending the week 4.55% lower.
Weak Chinese economic data this week increased worries of faltering demand. U.S. consumer sentiment fell for a fourth straight month in November and households' expectations for inflation rose again.
OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, will meet on Nov. 26. Iraq's oil ministry said Baghdad is committed to the OPEC+ agreement on determining production levels.
Wall Street's main indexes ended with big gains on Friday, boosted by heavyweight tech and growth stocks as Treasury yields calmed, while investors looked ahead to a next week's reports on inflation and other economic data. US 500 added on Friday 1.62%, the US 30 rose 1.14% and the US Tech 100 gained 2.40%.
Investors have been focused on benchmark Treasury yields, which have eased from 16-year highs, and monetary policy as they assess whether the Fed might be done raising rates to control inflation and when the central bank could start cutting rates.
This week the consumer price index report will be closely watched, along with data on producer prices and retail sales, which will further shape interest rate projections.
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