Good morning traders, welcome to Friday’s session. As we move into the final trading day of the week, let’s first review Thursday’s market movements and set the stage for today’s developments.
Thursday was notable for its continued volatility across major markets. On the macroeconomic front, we received producer price index (PPI) data from the US, which came in line with expectations, suggesting stable inflation pressures on the production side. However, the focus on economic data was overshadowed by another disappointing employment report from Australia. The lower-than-expected employment change added pressure on the Australian dollar, making it one of the weakest currencies for the week.
In earnings, Walt Disney surprised to the upside with better-than-expected results. This positive news lifted the stock by 6% by the close of Thursday’s session, providing a boost of optimism in an otherwise cautious market environment.
As for today, Friday’s macro calendar has already seen key data releases. Notably, China reported better-than-expected retail sales, which signals a potential boost in consumer confidence and economic activity in the region. Conversely, the UK’s GDP data came in weaker than anticipated, which has weighed heavily on the British pound, making it the weakest currency of the day. This comes after a challenging week for the pound, which has been under pressure due to underwhelming economic data.
The US dollar remains in a strong position, continuing its upward momentum and gaining almost 2% this week. Safe-haven flows into the dollar and Canadian dollar highlight investor caution amid global uncertainties. On the indices side, the week has been characterized by corrections, particularly in the first half. While there was some effort to recover in the latter half, today’s session opens with mixed sentiment, and European indices are currently struggling to hold gains.
Commodities reflect this cautious tone. Gold and other metals faced a bearish correction throughout the week, with gold breaking its long-term uptrend line, signaling potential challenges ahead. Oil also remains under pressure despite attempts to rebound, solidifying a bearish trend in the short term. Natural gas, on the other hand, has been one of the few bright spots, showing strength amid broader market struggles.
Cryptocurrencies, particularly Bitcoin, made headlines as the digital asset hit new all-time highs earlier this week. However, the latter half of the week saw a modest pullback as traders secured profits, leading to a minor correction.