US stocks had a strong week, closing near their weekly highs. Despite the shortened trading week due to the Independence Day holiday on July 4th, major indices showed significant gains, driven by positive economic data and continued investor enthusiasm for technology stocks.
European stocks were influenced by the nervousness surrounding the snap election called by President Emmanuel Macron. Despite the political uncertainties, major indices showed positive performance.
The commodities market experienced varied performance last week.
Gold prices rose as weaker US economic data increased hopes for Federal Reserve interest rate cuts, driving investors to seek the metal as a safe haven.
Silver followed gold’s trend, benefiting from safe-haven demand and expectations of monetary policy easing.
Crude oil prices were driven higher by expectations of tighter supply due to OPEC+ production cuts and increased summer driving demand in the US.
Brent prices rose on the back of OPEC+ production cuts and optimistic global demand forecasts.
Natural gas prices fell sharply due to higher-than-expected inventory builds and reduced demand from mild weather in key consumption areas.
The Forex market experienced varied performance last week, with the euro and the British pound gaining against the US dollar, while the yen stagnated. The Canadian dollar weakened slightly.
The EUR/USD pair has shown a notably smooth upward trend since Tuesday afternoon, driven by soft US Jobless Claims and ISM Services PMI reports, despite pre-vote uncertainty in France. The unexpected lead by a leftist alliance in the French elections resulted in a hung parliament, blocking Marine Le Pen’s far-right bid. Meanwhile, upcoming US and Eurozone data, particularly the consumer price index from the US and Germany, will be crucial in shaping expectations for future interest rate cuts.
The GBP/USD pair strengthened throughout the week, driven by soft US Jobless Claims and ISM Services PMI reports. The pound was bolstered by positive UK economic data and optimism around the UK’s economic outlook. The combination of these factors contributed to an overall upward trend for the GBP/USD pair.
The USD/JPY pair had a mixed week, experiencing a downtrend in the middle of the week, which was offset by a recovery by the end of Friday, ultimately closing near its opening level. The yen’s overall weakness supported Japan’s stock markets, hitting all-time highs, especially benefiting export-focused industries.
The USD/CAD pair trended downward from Tuesday to the end of Friday, where it saw a slight recovery. This movement was influenced by the strength of the Canadian dollar, bolstered by robust domestic economic data. Additionally, fluctuations in the USD/CAD pair were impacted by broader market sentiment and the performance of crude oil prices, which play a significant role in the Canadian economy.
The past week in the U.S. was marked by Independence Day celebrations, alongside significant macroeconomic news. Job growth slowed in June, with the unemployment rate rising slightly to 4.1%. The ISM Services PMI indicated a downturn in the services sector, falling into contraction territory. However, job openings increased slightly in May, and wage inflation showed signs of moderation.
In Europe, political uncertainty diminished after France’s legislative elections, where the far-right failed to secure a majority. The ECB maintained a cautious approach on inflation, and final estimates showed a slight decrease in eurozone inflation for June. Both Germany and France reported declines in industrial output, highlighting ongoing economic challenges.
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