There were some notable ups and downs in global markets this week. Our weekly overview of forex, stocks, crypto and commodity markets will summarize this week’s overall global market performance and give you ideas on how to act and prepare for future market trends.
Forex Weekly Overview
The dollar was on the defensive yesterday as a rebound in risk appetite weighed on safe-haven currencies.
In the afternoon, US GDP growth fell more sharply than previously estimated, exacerbating the dollar’s downward trend.
Some big data releases today could lead to major moves in the dollar. The Fed’s preferred measure of inflation – the core price index for personal consumption expenditures – is expected to slow. Will the dollar retreat as markets rein in rate hike bets?
How Have Other Currencies Been Performed?
The British pound (GBP) saw some volatility yesterday after Rishi Sunak announced his financial support package to help families struggling with the cost of living crisis.
While the measures were generally well-received, there appeared to be some concerns in the market. The Confederation of British Industry (CBI) has warned that a new windfall tax could deter investment while lamenting the lack of support for UK businesses. Some investors may also be concerned about rising government debt.
In the absence of UK economic data today, the pound may continue to trade domestic issues.
Despite weak trading conditions yesterday, the euro (EUR) rose as positive sentiment in European equities boosted sentiment among euro investors.
The shared currency also benefited from a negative correlation with the US dollar (USD), which weakened on the day.
Essential data from the Eurozone are still few and far between today. Therefore, the EUR can again trade from market sentiment and USD momentum.
The oil-sensitive Canadian dollar (CAD) rallied against many other currencies yesterday, even as retail sales surprisingly faltered in March. The uptrend was due to a $3 increase in the cost of crude oil.
Currently, oil prices will likely drive the Canadian dollar further without market-moving Canadian data today.
The Australian dollar (AUD) rose overnight after Australian retail sales rose 0.9%, marking the fourth consecutive month of solid sales growth.
The New Zealand dollar (NZD) was also higher in overnight trade as positive market sentiment boosted the risk-sensitive “NZD”.
Stocks Weekly Overview
European shares followed Asia higher, posting their biggest weekly gain since mid-March.
Mining stocks led the European Stoxx 600 higher, while utilities fell. Shares in British energy companies extended losses this week after the government announced a surprise tax plan in parliament on Thursday. BP said it would reconsider its plans in the country.
Better-than-expected earnings from Chinese tech companies boosted Asian shares. Alibaba Group Holding Ltd and Baidu Inc beat revenue estimates. US futures fell after gains on Wall Street on signs that consumers remained resilient despite inflationary pressures.
Global stocks are set to end a seven-week slump, keep valuations attractive and lure investors back into a market still clouded by rising inflation and interest rates, a bleak economic outlook in China, and the war in Ukraine.
Stocks saw their biggest inflows in 10 weeks as the “summer rally train” grew, Bank of America strategists said, citing data from EPFR Global. Citigroup strategists now recommend buying European stocks because of their attractive valuations compared to the US.
According to people familiar with the matter, state-owned automaker China FAW Group is considering buying a significant stake in troubled ride-hailing giant Didi Global in company news.
Others say a consortium backed by the billionaire Issa brothers are considering a bid for the international arm of Walgreens Boots Alliance Inc.
On the 100th day of Russia’s war in Ukraine, the United States could announce a new aid package for Kyiv that includes long-range missile systems and other advanced weapons as early as next week.
Russia’s efforts to avoid its first foreign bankruptcy in a century will be in focus again on Friday, when investors will receive about $100 million in interest on Russian debt.
Crypto Weekly Overview
Today, the cryptocurrency price plummeted below $29,000 as Bitcoin traded. The world’s largest and most popular cryptocurrency fell more than 2 per cent to $28,886. The coin is down 36% so far this year, trading well below its November 2021 peak of $69,000.
On the other hand, ether, a token tied to the Ethereum blockchain and the second-largest cryptocurrency, fell more than 10 per cent to $1,740. Meanwhile, the Dogecoin price fell 7% to $0.07 today, while the Shiba Inu fell more than 12% to $0.000017. Today’s global cryptocurrency market capitalization is $1.26 trillion, down more than 5% in the past 24 hours.
While Terra’s operators on Wednesday laid out a revival plan to start over with a new blockchain, investors in the rest of DeFi are far from convinced. Flaws in reducing the energy intensity of the Ethereum network have raised concerns.
Following the Terra crash, the Ethereum network’s demand for block space has dropped significantly, meaning the network’s so-called gas fees are falling.
Other digital tokens have also declined in performance as prices of Solana, Cardano, Avalanche, Polygon, Stellar, Uniswap, Polkadot, Terra (Luna), XRP, Litecoin, and Tron have all fallen over the past 24 hours.
Cryptocurrencies have been caught up in a sell-off in risk assets this year. Data showed US inflation was picking up, fueling investor concerns about the economic impact of aggressive central bank tightening. The crypto market downturn that began in April wiped billions of dollars in market capitalization within a month.
Commodities Weekly Overview
Gold prices rose on Friday as the dollar weakened, helping bullion gain a second week. At the same time, bets on a more aggressive monetary policy from the Federal Reserve dwindled.
Spot gold was up 0.3% at $1,855.12 an ounce at 0544 GMT. U.S. gold futures were up 0.2% at $1,851.00. Bullion is up 0.5% so far this week.
This week, expectations for the Federal Reserve’s monetary policy next year have weakened, especially with a weaker dollar supporting gold.
On the downside, price support lies at $1,830, and on the upside, the following key level is around $1,885.
Minutes of the Fed’s May 3-4 monetary policy meeting released on Wednesday showed that, as the market had expected, most participants favoured a further 50 basis points of interest rate hikes at the June and July meetings.
Higher US short-term interest rates and bond yields increase the opportunity cost of holding worthless bullion.
The US dollar index fell weekly for the second month, making gold lower for buyers holding other currencies.
Spot silver was up 0.7% at $22.14 an ounce, up about 1.7% this week.
Platinum rose 0.3% to $952.95. Palladium rose 0.5% to $2,024.52, a weekly gain of about 3.1% and its highest level since early April.
Weekly Overview: Conclusion
This was a general weekly overview of the most important market updates. According to analysts, forex, stocks, cryptocurrencies, and commodities have already seen some changes, with more expected in the coming weeks. Stay connected and follow our weekly updates on the latest market information and trends.