Weekly market recap

Your weekly global financial market newsletter

US stocks had another turbulent week, entering correction territory, but Friday's optimism ultimately limited significant losses. Gold approached the $3,000 per ounce level for the first time in history. Forex investors have stopped betting on the US dollar, and the euro is now the new favourite.

Indices

US equities have had an extremely volatile week, which, despite a strong rise on Friday, saw several negative records for major stock indices. While the S&P 500 index posted a 2.13% gain on Friday—the highest daily gain since the presidential election—it also recorded its fourth consecutive week in negative territory, the longest streak since last August.

Monday’s and Thursday’s sell-offs have already pushed the S&P 500 index into correction territory (a 10% loss from its February high), while the Russell 2000 index has moved closer to a bear market (a 20% decline from its last high).

European stocks were not spared from Monday’s sell-off, but they rebounded for the rest of the week thanks to positive news regarding a possible ceasefire in Ukraine. The pan-European STOXX Europe 600 Index ended 1.23% lower, France’s CAC 40 dropped 1.14%, Germany’s DAX fell 0.10%, and the UK’s FTSE 100 declined by 0.55%.

US30

-3.07%

US100

-2.46%

US500

-2.27%

GER40

-0.10%

Commodities

The price of gold continued its rise this week, breaking above the $3,000 per troy ounce mark for the first time in history. Although it did not remain above this level for long, demand for gold as a safe-haven asset remains high amid geopolitical uncertainty and concerns about future economic developments under the leadership of an unstable US president.

Also supporting gold prices is strong demand from central banks and ETF investors, with China increasing its gold reserves for the fourth consecutive month. This week, central banks may influence gold prices, as some are set to decide on their monetary policy settings.

Despite Friday’s gains, oil prices have hovered around $70 per barrel for two weeks, as geopolitical uncertainty in the Red Sea and shifting conditions surrounding a possible ceasefire in Ukraine keep investors on edge. Tensions in the Red Sea have escalated following an attack by Houthi militants and subsequent US military strikes.

On the other hand, moderate optimism remains regarding the situation in Ukraine, which could lead to increased Russian oil supplies to Western countries. In the short term, a downward movement in oil prices is more likely, but geopolitical tensions could once again disrupt markets and drive prices higher.

Gold

+2.47%

Silver

+3.89%

BRENT

+0.31%

NATGAS

-6.71%

Forex

The euro continues to strengthen against the US dollar, a trend that began at the end of February. While the upward movement slowed this past weekend, long positions on the EUR/USD pair have reached all-time highs last seen in August 2020, when the European Commission announced a recovery package following the COVID-19 pandemic, according to Bank of America Securities data.

Today, investors are reacting positively to fiscal plans in Germany, including a proposed €500 billion fund for infrastructure and a loosening of the so-called debt brake to increase defense spending.

The US dollar, on the other hand, is moving in the opposite direction. After a bullish sentiment in December, it is now facing increased shorting pressure, though it remains far from historical lows. Since the start of the year, when the dollar hit six-month highs in January, it has already declined by more than 4%.

A key factor this week will be Wednesday’s interest rate decision, where policymakers are widely expected to keep rates unchanged.

EUR/USD

+0.43%

USD/JPY

+0.38%

GBP/USD

+0.14%

USD/CAD

-0.07%

Macro

Last week was relatively uneventful in terms of macroeconomic data. Donald Trump announced once again that the United States will double tariffs on Canadian steel and aluminum imports to 50% starting Wednesday. He described the move as retaliation against the province of Ontario’s 25% surcharge on electricity supplied to three US states. Trump also threatened to significantly increase tariffs on Canadian auto imports beginning April 2 unless Ottawa lifts its retaliatory measures.

On Tuesday, job openings in the United States increased by 232,000 to 7.74 million in January 2025, up from a revised 7.51 million in December and surpassing market expectations of 7.63 million.

US year-on-year inflation fell to 2.8%, a tenth of a percentage point lower than analysts had expected. Inflation stood at 3% in January. Core inflation dropped to 3.1%, the lowest level since April 2021. The slowdown in inflation could influence the US central bank’s next interest rate decision.

US manufacturing inflation remained unchanged month-on-month in February (estimate: +0.3%, January: +0.6%) but rose to 3.2% year-on-year (estimate: +3.3%, January: +3.7%).

Annual inflation in Germany was 2.3% in February, unchanged from January. On a month-on-month basis, prices increased by 0.4% after a 0.2% decline in January. In this case, the preliminary data were also confirmed.

The UK economy unexpectedly shrank by 0.1% in January, whereas it was expected to grow by 0.1% following December’s GDP increase of 0.4%. However, the rolling quarterly growth rate of 0.2% was higher than the 0.1% recorded in December.

What to watch out for this week

In the coming week, investors will be focused on Donald Trump’s potential next steps and statements, as well as the outcome of Wednesday’s Federal Reserve Monetary Policy Committee meeting. While US interest rates are likely to remain unchanged, close attention will be paid to the accompanying comments and the subsequent press conference by Fed Chair Jerome Powell, which could provide hints about future rate developments in the months ahead.
Alongside the Fed, the Bank of Japan will discuss monetary policy settings on Wednesday, while the People’s Bank of China, the Bank of England, and the Swiss National Bank will hold meetings on Thursday.
Data on housing starts, building permits, existing home sales, and the NAHB Housing Market Index will offer insights into the state of the US housing market.
In Europe, this week’s key economic data includes the UK labor market report for January. Unemployment is expected to rise to 4.5%, the highest level since August 2021, while wage growth is likely to slow slightly from a 13-month high.
On Wednesday, Eurostat is expected to confirm a modest rise in eurozone inflation for February, while Germany’s ZEW economic sentiment indicator is also projected to reach an eight-month high.

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