WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
Equities continued their upward trend, pushing the Dow Jones Industrial Average and the S&P 500 Index to new record highs and marking the latter’s 12th weekly gain in the last 13. The market’s ascent was broadly distributed, although the small-cap Russell 2000 Index lagged, remaining nearly 20% below its historical intraday high. In domestic currency evaluations, the pan-European STOXX Europe 600 Index concluded the week with a 3.11% gain, buoyed by positive corporate results and China’s announcement of additional stimulus measures. The European Central Bank’s decision to keep interest rates unchanged and convey a potentially more dovish stance further supported the stock market, with Germany’s DAX rising by 2.45%, and the UK’s FTSE 100 Index adding 2.32%.
US30 +0.65% |
US100 +0.62% |
US500 +1.06% |
GER40 +2.45% |
Oil prices experienced a second consecutive weekly rise, settling at their highest levels in nearly two months. Positive indicators of U.S. economic growth, Chinese stimulus efforts, and Middle East supply concerns contributed to the increase. Brent crude futures closed at $83.55 per barrel, and U.S. West Texas Intermediate crude reached $78.01 per barrel, marking the highest close since November. Several factors, including geopolitical risks and a significant decline in U.S. crude stocks, influenced the upward trend, resulting in the largest weekly gains since October 13. Gold prices remained within a narrow range, heading for a second consecutive weekly decline as traders awaited cues on U.S. interest rates, with upcoming inflation data and a Federal Reserve meeting in focus. Copper prices, however, were poised for a strong weekly performance due to China’s additional stimulus measures, boosting expectations for robust demand. The anticipation of U.S. monetary policy signals, coupled with positive economic indicators, may limit significant gains in gold, while copper gains were driven by optimism surrounding China’s economic stimulus. The Israel-Hamas conflict and Middle East tensions provided some support for gold as a safe-haven asset. The focus now turns to U.S. PCE inflation data and the upcoming Fed meeting for further market direction. Copper prices eased slightly but were set for a positive week, driven by optimism about China’s economic outlook. Analysts remain cautious about the impact of monetary stimulus on China’s economy, and upcoming PMI data is awaited for additional economic insights.
NATGAS +7.84% |
The U.S. dollar stabilised following strong U.S. growth data, with the Dollar Index unchanged at 103.372. The positive tone from the U.S. GDP estimate, indicating a 3.3% annualised growth in Q4 2023, contributed to the dollar’s strength. The focus turns to the release of the PCE price index data, the Fed’s preferred inflation gauge, for further insights into rate-cut expectations. The euro traded lower against the dollar at 1.0827 after the European Central Bank meeting, where President Christine Lagarde hinted at the possibility of a rate cut this summer. The GfK German consumer sentiment index fell, indicating challenges for Germany’s economic recovery. In Asia, the USD/JPY rose to 147.82, and the USD/CNY traded higher at 7.1809 after the PBOC’s move to reduce banking reserve requirements sparked optimism about China’s economic recovery.
EUR/USD -0.40% |
USD/JPY +0.02% |
GBP/USD +0.01% |
USD/CAD +0.12% |
Rachel Aguirre, U.S. Head of BlackRock’s iShares Products, expressed satisfaction with the performance of the iShares Bitcoin Trust (IBIT), stating that it had recorded a remarkable trading volume of $3 billion within the first two weeks of trading. The ETF attracted over $1.6 billion in inflows after its release, highlighting strong investor demand for Bitcoin exposure. Aguirre emphasised BlackRock’s commitment to providing investors access to Bitcoin and welcomed recent regulatory developments, expressing a positive view toward SEC Chairman Gary Gensler’s stance on the cryptocurrency industry.
BTC +0.03% |
ETH -8.95% |
LTCUSD -5.64% |
XMRUSD +6.20% |
The UK saw a higher-than-expected increase in business activity in January, pointing to a possible exit from recession. The S&P Global/CIPS UK preliminary composite PMI rose to 52.5, reaching its highest level in seven months. Despite this positive development, disruptions in the Red Sea led to a rise in input prices in the manufacturing sector for the first time since April, potentially contributing to a rise in inflation.
In Europe, the European Central Bank (ECB) maintained its key interest rates at record highs, emphasising a commitment to sufficiently restrictive monetary policy to achieve the 2% inflation target. ECB President Christine Lagarde, while deeming it premature to discuss rate cuts, acknowledged a more dovish tone by recognizing the ongoing disinflation process. Eurozone business activity showed signs of stabilisation, with the composite Purchasing Managers’ Index (PMI) rising to 47.9 in January from 47.6 in December, marking the eighth consecutive month of decline.
In the United States, the economic calendar revealed surprises, with manufacturing activity in the Mid-Atlantic region weaker than expected. However, national readings showed positive trends, as the S&P Global flash manufacturing index returned to expansion territory for the first time since April 2023. Business conditions strengthened towards the end of 2023, with a 3.3% growth in gross domestic product (GDP) and a core personal consumption expenditure (PCE) price index aligning with the Fed’s target. Personal spending in December surpassed expectations, rising by 0.7%.
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