Good morning, traders, and welcome to Friday! As we approach the end of the week, let’s take a closer look at the key events that unfolded yesterday and what to expect today.
Yesterday was packed with important economic data that shaped market sentiment. In Europe, we saw slower-than-expected inflation data from Germany, which came in lower, providing some relief to European markets worried about aggressive rate hikes. However, across the Atlantic, the U.S. released a stronger-than-expected GDP growth figure of 3%, beating the forecast of 2.8%. This positive economic news helped support the U.S. Dollar, but it also raised questions about the Federal Reserve's next steps, as stronger growth could mean more room for further rate hikes.
In the commodities market, we continued to see mixed movements. Oil prices remained volatile, with WTI crude bouncing off a mid-term downtrend line earlier in the week, but still struggling to find a clear direction. Precious metals like gold and silver also moved sideways. Gold, in particular, is hovering around key support levels near $2,480 after hitting long-term highs earlier in the week. This price action suggests a cautious sentiment among traders, who are awaiting more clarity from economic data.
As we head into Friday, markets are digesting these mixed signals. Already today, we’ve seen higher-than-expected inflation data from Japan at 2.4%, up from the expected 2.2%. Meanwhile, Australian retail sales figures have come in weaker, adding pressure on the Australian Dollar.
Looking ahead, we have several key data points on the agenda that could further shape market sentiment. We’re expecting inflation data from the Eurozone, forecasted at 2.2%, which will be closely watched to gauge the ECB’s next move. In addition, we have Canadian GDP data, expected at 0.1%, and the U.S. Core PCE Price Index, a critical measure of inflation for the Federal Reserve, expected to rise by 0.2%. These releases will likely provide more clues on the economic outlook and influence market direction as we close out the week.
On the currency front, the New Zealand Dollar continues to be the strongest performer, buoyed by strong business confidence data earlier this week. The Japanese Yen and the U.S. Dollar are currently weaker, with the Yen showing signs of a correction following its recent gains. This trend could continue depending on how today’s economic data plays out.
Indices are showing mixed performances. European indices are trying to recover from a bearish correction triggered by NVIDIA’s earnings report earlier in the week. The NASDAQ, in particular, is still under pressure but is attempting to stabilize after a significant drop. On the commodities front, oil and natural gas are looking to regain some ground, while precious metals are trading cautiously.
Today, keep a close eye on the Eurozone inflation data and the U.S. Core PCE Price Index, as these figures could significantly impact currency pairs and overall market sentiment. With key economic indicators still to come, markets could see increased volatility as traders position themselves for the weekend.