Weekly market recap

Your weekly global financial market newsletter

  • Financial markets have been increasingly influenced by external factors in recent weeks, leading to heightened volatility and unexpected movements across individual markets. In addition to President Trump, who at times behaves unpredictably, last week saw intensified negotiations over the end of Russia's military campaign in Ukraine. As a result, a slight sense of optimism prevails in the markets today, though it may not last long.

Indices

U.S. stocks rose over the past week, with the Nasdaq 100 technology index even surpassing its all-time high on Friday. The biggest gains occurred on Thursday when Donald Trump decided against imposing new global tariffs, opting instead to introduce reciprocal tariffs on a country-by-country basis, but only starting on April 1.

European stocks also performed well during the week, likely supported not only by Trump’s tariff decision but also by renewed peace talks regarding the war in Ukraine. Both the STOXX 50 and STOXX Europe 600 indices once again reached new all-time highs. The STOXX Europe 600 ended the week up 1.78%, Germany’s DAX climbed 3.33%, France’s CAC 40 gained 2.58%, and the UK’s FTSE 100 added 0.37%.

US30
+0.55%
US100
+2.90%
US500
+1.47%
GER30
+3.33%

Commodities

Mixed macroeconomic data from the U.S. helped boost commodities, including gold, which once again reached record highs. Although gold prices fell on Friday, they approached the $3,000 per troy ounce level during the week. While higher-than-expected inflation in the U.S. may have strengthened the dollar, weak retail sales data and a decline in real Treasury yields could support further gains for gold.

Another significant factor bolstering gold prices is continued central bank purchases, which surpassed 1,000 tonnes for the third consecutive year in 2024. Additionally, purchases have increased by 54% year-on-year since Donald Trump took office.

Oil, on the other hand, continues to decline, influenced by developments over the past week, including the resumption of peace talks between the U.S. and Russia regarding the war in Ukraine. The optimistic scenario suggests that if an agreement is reached, an influx of Russian oil could weigh on the market, leading to a price reduction. Another potential risk to oil prices is the trade war triggered by Trump’s tariffs.

Gold
+0.74%
Silver
+1.07%
BRENT
+0.11%
NATGAS
+12.57%

Forex

The euro and the British pound strengthened significantly during the week, despite U.S. inflation sparking speculation about a possible halt to interest rate cuts. Among the main factors supporting the euro and the pound—and consequently weakening the U.S. dollar—is the continued delay in the implementation of promised tariffs by President Donald Trump, who now plans to introduce reciprocal tariffs only from April.

Additionally, disappointing macroeconomic data at the end of the week reinforced expectations that the Fed will move to cut interest rates later in the year. Another factor that could support the euro and the pound against the dollar is the increasing likelihood of a deal to end the conflict in Ukraine.

EUR/USD
+1.57%
USD/JPY
+0.66%
GBP/USD
+1.58%
USD/CAD
-0.78%

Macro

The main news of the week that unpleasantly surprised investors was the U.S. CPI data. Consumer prices increased by 0.5% month-over-month and 3.0% year-over-year in January, marking an acceleration from December’s figures of 0.4% and 2.9%, respectively, whereas stagnation had been expected. The core consumer price index, which excludes volatile food and energy prices, rose by 0.4% in January, up from 0.2% in December.

Additionally, Thursday brought the release of PPI data, which also unexpectedly rose by 0.4% in January, surpassing the expected 0.3% increase. Then, on Friday, retail sales fell by 0.9% in January—the biggest drop in a year—missing expectations and raising concerns about consumer spending.

In contrast, the UK GDP data was a positive surprise, as the economy grew by 1% in Q4 last year, defying economists’ expectations of a 0.1% decline. A significant contributor to this growth was GDP expansion of 0.4% in December, well above the anticipated 0.1%.

For the euro area as a whole, GDP grew by 0.1% in Q4, according to the second estimate, outperforming expectations of stagnation. On an annual basis, GDP expanded by 0.9%, in line with forecasts.

What to watch out for this week

  • Investors will be closely watching statements from several FOMC members over the next week for insights into the central bank's policy outlook, as well as Wednesday's release of the FOMC Minutes.
  • Additionally, the U.S. will publish several key housing market data points, including building permits, housing starts, and existing home sales, which may indicate a continued slowdown in the sector.
  • The S&P Global PMIs will also be closely monitored in both the U.S. and Europe, as they may provide valuable insights into economic activity on both sides of the Atlantic in February.
  • Consumer confidence indicators will be another focus, with the Michigan Consumer Sentiment Index in the U.S. and the ZEW Sentiment Index for Germany and the broader Eurozone. Meanwhile, in the UK, important data on inflation and the labor market will be released.

Disclaimer

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