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It is possible that Monday won’t be the typical “quiet Monday” after the Dollar’s surge on Friday. The Reserve Bank of Australia’s minutes, Canadian inflation, US retail sales, Chinese activity, and other events make Tuesday the busiest day of the week for economic statistics. Australia will report labour market information later this week, while the Bank of Mexico will make an interest rate decision.
The US dollar reached new weekly highs as the week came to a close. The US calendar for the following week is light, with Tuesday’s Retail Sales report being the main event. The debt ceiling standoff and financial issues are still current events. Powell and Williams will both make speeches about the Federal Reserve.
The US Dollar Index surpassed pertinent critical levels and climbed beyond 102.50, recording its best daily close in more than a month. The short-term risks now seem to be more skewed to the upside. The worsening in market mood was one of the factors that supported the US Dollar. Globally significant market indices ended the week with marginal losses.
Despite indicators of slowing inflation and improving labour market conditions in the US, US rates ended the week marginally higher. The 10-year US Treasury yield ended the day at 3.44%, while the 2-year yield was 4%. The wide range of yields continues to move sideways, stuck between erratic forecasts for rates by year’s end, the short end of the curve being sensitive to the debt ceiling turmoil, and the Federal Reserve’s projections for rates.
The fourth consecutive weekly fall in crude oil prices was caused by the bleak global outlook. Silver fell 6.6% throughout the week, ending at $24.00, while Gold completed the week unchanged, maintaining around $2,000 in metals.
Due to a stronger US Dollar and despite hawkish comments from the European Central Bank (ECB), EUR/USD experienced its biggest weekly drop since September 2022. The pair retreated to 1.0850, the lowest level in a month, after failing to move over 1.1100.
From monthly highs near 1.2700, the GBP/USD reversed direction and fell to values under 1.2450. Data on employment in the UK is due on Tuesday. Several members of the Monetary Policy Committee of the Bank of England are scheduled to speak.
Due to the recovery in Treasury yields, USD/JPY soared on Friday, breaching significant resistance levels and reaching a one-week high of 135.70.
USD/CAD increased from 1.3310 to 1.3560, reversing the previous week’s losses. It keeps moving sideways in a big range. On Tuesday, Canada will release its inflation report, and the Bank of Canada will release its Financial System Review on Friday.
Turkey will hold its general elections on Sunday. In recent days, the Turkish lira’s decline quickened, setting new record lows.
Also Read:
Trend of the week: Poor corporate results, US regional banks concerns
Gold prices retreat modestly but maintains upbeat outlook
Oil prices retreat on stronger dollar, demand fears
US consumer sentiment slumps on debt ceiling impasse
