Hello traders, and welcome to the start of a new week! We are still feeling the effects of Jerome Powell's recent remarks, where he indicated that rate cuts are imminent and emphasized that unemployment, rather than inflation, has become the Fed's primary concern. Last week was a fantastic one for stocks, largely influenced by the Fed's dovish stance, and Powell's words continue to cast a significant shadow over this new trading week.
Monday kicks off on a quiet note for the macro calendar. The key data points to watch include Germany’s Ifo Business Climate Index, expected at 86, and U.S. durable goods orders, anticipated to rise by 4%. Despite the subdued start, markets are in good shape, with further gains anticipated as the week unfolds.
In the currency market, we’re seeing strength in safe-haven currencies today, with both the Japanese Yen and Swiss Franc gaining ground. Meanwhile, the New Zealand Dollar, Australian Dollar, and British Pound are currently among the weakest performers. This suggests a cautious sentiment as traders look for safety amid potential market volatility.
Commodities are showing some interesting movements as well. Natural gas is experiencing a notable rise, and oil prices are climbing higher. Precious metals are also on the move, with silver, copper, palladium, platinum, and gold all making significant gains. The rise in metals indicates strong buying interest, possibly due to concerns over economic stability and inflation expectations.
From a technical standpoint, the charts suggest we could see continued strength in the Japanese Yen and Swiss Franc this week. The USD/JPY pair, in particular, seems poised to test new mid-term lows if the current trends continue. However, as always, we’ll need to monitor the markets closely to see if this direction holds.