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The market sentiment was a mixed bag last week, with a rotation of growth for shares of witnessed value. On Wall Street, the Dow Jones Industrial Average gained about 1.8%, while the high-tech Nasdaq 100 lost about 1.91% of its value. In Europe, the UK’s FTSE 100 outperformed, gaining 2.27%. Japan’s Nikkei 225 fell 0.35%.
All eyes remained on long-term Treasury yields. The 10-year rate continued to rise to new highs for the year, reflecting increased confidence in the broader economic outlook, as inflation expectations rise. Fed Chairman Jerome Powell also seemed very optimistic about developments in the bond markets.
The US dollar mostly outperformed the main counterparts, with the exception of the Canadian dollar. Some of the worst performers were the Swiss franc and the Japanese yen. Looking at commodities, WTI crude oil prices skyrocketed, closing at the highest level since 2018. OPEC +’s unexpected production boosted energy prices. Anti-fiat gold prices have further weakened.
Ahead, traders will be attuned to the monetary policy announcements from the European Central Bank and the Bank of Canada. The increase in long-term government bond yields was not mutually exclusive to the United States; those in Canada and Europe are also increasing. As such, it will be critical to see how central banks feel about long-term bonds and whether an action is justified or not.
Covid’s vaccines have driven the improvement in global growth prospects, but as nations open up, there is a risk that some may let their guard down. Traders will also be looking at US and German CPI data for updates on inflation. Canada will release its latest employment report, with the sentiment of Australian and American consumers also crossing the wire. What else is in store for the future?
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Fundamental forecasts:
Fundamental US Dollar Forecast: US Dollar Inflation Data After NFP Rise
The US dollar is rising after a burst NFP report strengthened confidence in the US economic recovery. Markets will now turn their attention to next week’s US inflation data, which could boost the dollar further.
Nasdaq 100, S&P 500, Dow Jones Forecast: growth, technology stocks falling out of favor?
The increase in long-term Treasury yields and a relatively optimistic Fed could put the Nasdaq 100 at risk, as the Dow Jones holds up. Are growth stocks falling out of favor for value stocks?
Euro forecast: EUR / USD will weaken if the ECB increases bond purchases
This Thursday’s meeting of ECB policymakers is live; there will be no major changes in the eurozone’s monetary policy, but it could be adjusted in response to rising sovereign bond yields.
Gold price outlook remains mired by broader recovery in US yields
The recovery of longer-term US Treasury yields may keep gold prices under pressure, as the Federal Reserve appears to be in no hurry to change the path of monetary policy.
Crude oil prices aiming for greater OPEC surprise and inflation expectations
Supply constraints, recovery in global demand and rising inflation expectations could raise crude oil prices in the short term.
GBP weekly forecast: GBP / USD, GBP / JPY struggling to undo the change at the moment
The pound sterling continues to face downward pressure as corrective trading continues.
Canadian dollar forecast: Loonie awaits BoC guidance on QE pace
The Canadian dollar may extend its recent extension of gains, considering the potential that the Bank of Canada may signal a reduction in QE along with its interest rate decision scheduled for this week.
Technical forecasts:
Dow Jones, Nasdaq 100, S&P 500 Predictions for the following week
Given the size of the rise in the eleven months prior to the start of the current decline, a broader settlement appears justified.
US dollar technical forecast: EUR / USD, USD / JPY, USD / CAD
The US dollar gained 2.80% in less than two weeks – a stark contrast to last year’s extended settlement. Is a bigger change happening as the rate markets go wrong?
Gold Weekly Technical Forecast: Gold sinks to a crucial level – Bulls Last Hope?
The rise in yields and the US dollar creates a weak environment for gold, which is trading at a 9-month low.
Australian dollar forecast: Aussie March Lower- AUD / USD Eyes 2021 Low
The Australian dollar plunged 4.8% from annual highs, with the reversal risking a deeper retraction in March. Here are the levels that matter on the weekly AUD / USD chart.
Weekly technical forecast of the euro: basically a falling knife
No matter where you look, the euro is under great technical pressure: against commodity currencies (EUR / AUD, EUR / CAD, EUR / NZD) or even against Nordic currencies (EUR / NOK, EUR / SEK). In this week’s technical review, we’ll look at the damage done to the three main EUR crosses: EUR / GBP, EUR / JPY and EUR / USD.
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
