Weekly market recap

Your weekly global financial market newsletter

  • On Saturday, U.S. and British forces launched strikes on more than a dozen Houthi targets in Yemen, as part of ongoing efforts against the Iran-linked group responsible for regional shipping attacks. Despite repeated strikes, Houthi assaults continue, disrupting global trade and raising shipping costs. The recent strikes hit 18 Houthi locations, including weapon and missile storage sites, air defence systems, radars, and a helicopter. U.S. Defense Secretary Lloyd Austin stressed that the aim was to disrupt and weaken the Iranian-backed Houthi militia, warning of repercussions if attacks persist. Several countries, including Australia, Bahrain, Canada, Denmark, the Netherlands, and New Zealand, supported the military action. In response, Houthi-affiliated Al Masirah TV portrayed the strikes as hindering Yemen's aid efforts for Palestinians in Gaza. The Houthis have claimed recent attacks on cargo ships, a U.S. destroyer, and Israel's port and resort city, disrupting the Suez Canal route and raising concerns about environmental damage and maritime safety. The European Union and the United States have initiated naval missions to protect Red Sea navigation from Houthi threats.
  • Ukrainian President Volodymyr Zelenskiy warned of a potential Russian offensive in late May or summer, stressing Kyiv's readiness with its own battlefield plan. Zelenskiy called for unity with Western allies, highlighting the need for timely approval of military aid by U.S. Congress. He revealed that 31,000 Ukrainian soldiers were killed since February 2022 and called for stronger Western support. Despite Russia’s recent successes, Zelenskiy remains hopeful, especially about receiving long-range missiles. While Kyiv has a clear strategy to combat Russian forces, details were not disclosed. Zelenskiy emphasised troop rotations and improving reserve forces. He is aiming for a spring summit in Switzerland to discuss peace initiatives with allies, intending to present a peace plan to Russia later. The number of wounded soldiers was not disclosed, citing concerns about support for Russian war planners. The estimate of Ukrainian military losses was rejected by the Russian foreign ministry.
  • Germany legalised cannabis cultivation and possession for private use through a law passed by Chancellor Olaf Scholz's coalition. Individuals can now grow up to three plants and possess up to 25 grams of cannabis. Larger non-commercial cultivation is permitted for cannabis clubs with up to 500 adult members. Health Minister Karl Lauterbach cited the containment of the black market and the protection of young people as goals. However, opposition members criticised the move, arguing it could encourage drug use. Lauterbach responded that legalisation acknowledges the reality of widespread cannabis use and aims to mitigate associated risks, given the drug's increased potency and impurities. Germany joins eight other countries in legalising recreational cannabis, while medical use is permitted in many other places. Concerns persist about the law's effectiveness in combating illegal drug trade.


During the shortened week due to the Presidents’ Day holiday on Monday, equity indices generally experienced an upward move, although the small-cap Russell 2000 Index registered losses. Both the S&P 500 Index and the Nasdaq Composite Index reached new intraday highs. Notably, the Nasdaq Composite recorded its most significant daily gain in approximately a year on Thursday, fueled by NVIDIA’s remarkable addition of USD 277 billion to its market capitalization. In terms of local currency, the pan-European STOXX Europe 600 Index surged to a record level, concluding the week 1.15% higher. This increase was attributed to NVIDIA’s exceptional quarterly results, which stimulated a global rally and bolstered demand for technology stocks. Germany’s DAX saw a notable rise of 1.76%, while the UK’s FTSE 100 Index remained relatively unchanged, reflecting weakness in the mining and energy sectors.



Oil prices experienced a nearly 3% drop on Friday, leading to a weekly decline as a U.S. central bank official hinted at potential delays in interest rate cuts. Brent crude settled at $81.62 a barrel, down 2.5%, while U.S. West Texas Intermediate crude fell to $76.49, a decrease of 2.7%. This weekly decline, with Brent falling about 2% and WTI over 3%, was influenced by concerns over delayed rate cuts affecting economic growth and oil demand. Gold prices in Asian trading remained stable amid expectations that the Federal Reserve would not cut interest rates early in 2024. Despite some weekly gains, concerns over sustained high rates and a strong dollar limited significant price increases. Comments from Fed officials and positive labour market data diminished expectations for rate cuts. Gold prices stayed within a narrow range, reflecting market uncertainty. In industrial metals, copper futures saw weekly gains on hopes of economic stimulus from China amid a slowing economic recovery.



On Friday, the US Dollar Index was poised for its first weekly decline in 2024, reflecting a temporary halt in its prolonged rally driven by expectations of delayed rate cuts by the Federal Reserve. Investors have adjusted their forecasts for rate cuts, now projecting the first cut to occur in June instead of May, and have significantly reduced the number of expected rate decreases. Traders are closely monitoring upcoming economic data, particularly the February jobs report, for potential impacts on Fed policy decisions. While the Dollar Index remained stable on Friday, it is on track for a weekly loss, fluctuating within a range between recent highs and lows. Analysts anticipate a weakening dollar in the second quarter, expecting the Fed to initiate rate cuts, with the euro potentially strengthening against the greenback by year-end. Improved risk sentiment globally may have tempered demand for the dollar, which is typically seen as a safe-haven currency. Meanwhile, the yen has been the weakest G10 currency in 2024, with investors favouring higher-yielding currencies over the yen amid expectations of prolonged low rates in Japan. In the cryptocurrency market, bitcoin experienced a slight decline on Friday, falling to $51,122.



A surge of interest in bitcoin exchange-traded funds (ETFs) is leading some investors to shift their holdings from gold-backed ETFs, although analysts and fund managers believe this trend is unlikely to challenge gold in the long term. Spot bitcoin ETFs are seen as an alternative to gold for investors seeking to hedge against inflation. The January approval of ETFs tracking the price of bitcoin by U.S. regulators has propelled the ETF market towards further gains. While ETFs revolutionised the gold market in the early 2000s by creating new demand, bitcoin may substitute for gold in some investor portfolios as a hedge against global disorder and financial system dysfunction, according to experts. Since the approval, major bitcoin ETFs have accumulated billions in assets, while gold-backed ETFs experienced outflows. However, caution is advised due to Bitcoin’s volatility and gold’s historical role as a safe haven during times of political or economic uncertainty. Gold is valued for wealth preservation, while bitcoin is viewed as more speculative with uncertain returns.



In the United Kingdom, the composite PMI output index rose to 53.3 in February from 52.9 in January, accompanied by a notable improvement in customer demand. Bank of England (BoE) Governor Andrew Bailey expressed his “comfort” with investors speculating on rate cuts this year, while also noting that the economy was displaying “distinct signs of an upturn” following last year’s recession.


Across the eurozone, preliminary PMI data for February indicated a potential stabilisation of the economy, supported by a recovery in the services sector. The provisional estimate of the HCOB eurozone composite PMI for output rose to 48.9 from 47.9 in January, reaching an eight-month high but remaining in contractionary territory. However, Germany’s composite PMI for economic output declined for the eighth consecutive month, while France also experienced a slowdown in output. Conversely, output in the rest of the eurozone expanded for the second consecutive month.


Meanwhile, final data confirmed a 0.3% contraction in Germany’s economy in the fourth quarter, attributed to sharp declines in government consumption due to budget constraints and a reduction in gross fixed capital formation as companies scaled back investment. The German government substantially lowered its economic growth forecast for the year to 0.2% from 1.3%, citing weaker global demand, geopolitical uncertainties, and higher inflation.


In the United States, the week saw a relatively light economic calendar, with most data broadly in line with expectations. Notably, initial and continuing jobless claims came in below consensus estimates, indicating a persistently tight labour market. S&P Global’s early estimates of purchasing managers’ indices (PMIs) for services and manufacturing showed an unexpected improvement in manufacturing activity, reaching its highest level in 17 months. However, business activity in the services sector slightly cooled. Federal Reserve Board Governor Christopher Waller noted in a speech on Thursday that inflation was higher than expected in January, emphasising the need to ensure continued progress on inflation, while also expressing confidence in inflation returning to the Fed’s 2% target. He emphasised the importance of analysing data over the next few months to determine whether January’s inflation spike was a temporary anomaly or a more significant concern.

What to watch out for this week

  • In the United States, investor attention is expected to return to a busy economic calendar, accompanied by numerous speeches from Federal Reserve policymakers. Key data points to watch include the PCE price indices, personal income and outlays, the ISM Manufacturing PMI, and durable goods orders. Forecasts suggest a 0.3% rise in PCE prices for January, slightly higher than the 0.2% increase in December, with core prices expected to accelerate by 0.4%. Additionally, expectations indicate a 0.3% increase in consumer spending and a 0.5% rise in income. Moreover, the ISM survey is likely to signal a continued contraction in the manufacturing sector throughout February, while durable goods orders are predicted to have declined by 4.5% in January after remaining unchanged in December. Investors will also closely monitor the second estimate of fourth-quarter GDP data, new and pending home sales, Case-Shiller home prices, Chicago PMI, Dallas Fed Manufacturing Index, and advance estimates of wholesale sales and the goods trade balance.
  • In Europe, significant reports on inflation and employment are due to be published, covering the Euro Area and key countries such as Germany, France, Italy, and Spain. The annual inflation rate in the Euro Area is expected to decrease to 2.5% in February, with the core rate anticipated to drop to 2.9%, marking the lowest figure since February 2022. In Germany, the consumer climate indicator from GfK is projected to rebound from an 11-month low, while retail sales are expected to recover following two consecutive months of decline. Spain's manufacturing sector is forecasted to stagnate, while Italy is expected to witness a slight contraction amidst an ongoing 11-month period of decline. Turkey and Switzerland are among the European nations continuing to update their Q4 GDP data. Additionally, upcoming data releases include the Euro Area's business survey, Italy's 2023 GDP and government budget data, and Switzerland's KOF leading indicator and retail sales figures.
  • In the United Kingdom, attention will focus on the Bank of England's monetary indicators and Nationwide housing prices, as well as the CBI gauge for distributive trades and final manufacturing PMI.
GMT +2


All information provided on this site is intended solely for the study purposes related to trading on financial markets and does not serve in any way as a specific investment recommendation, business recommendation, investment opportunity, analysis or similar general recommendation regarding the trading of investment instruments. The content, in its entirety or parts, is the sole opinion of FTMO and is intended for educational purposes only. The historical results and/or track record does not imply that the same progress is replicable and does not guarantee profits or future profitable trading records or any promises whatsoever. Trading in financial markets is a high-risk activity, and it is advised not to risk more than one can afford to lose!