Hello traders, welcome to Friday. As we wrap up the week, market sentiment remains fragile, but there are signs of cautious optimism in early trading. Thursday was another challenging session, particularly for equities, as indices struggled to maintain any meaningful upside momentum. In the US, producer price index (PPI) inflation came in weaker than expected at 0.0% instead of 0.3%, but this did little to provide relief. The market reaction was mixed—initial optimism quickly faded as concerns about growth and broader economic conditions took over. Meanwhile, in Europe, markets remained under pressure despite some resilience earlier in the week.
On Friday morning we focused on the UK GDP report, which showed a contraction of -0.1% instead of the expected 0.1% growth. This immediately pressured the British pound, though the currency found some support as traders digested the data. The US dollar remained strong despite softer inflation data throughout the week, reinforcing the idea that risk-off sentiment is driving flows into safe havens.
Looking at Friday morning’s market, indices are attempting a small recovery, with US and European futures in the green. However, after a week of selling pressure, this could simply be a temporary bounce rather than a sustainable shift in sentiment. Key attention now turns to the University of Michigan consumer sentiment data, expected at 63.9, which could influence the final trading session of the week.
On the commodity front, gold remains strong, trading near its recent highs as investors continue to seek safety. Other metals like platinum and copper are holding gains as well, reinforcing the bullish trend in this space. Oil, on the other hand, is trying to extend its rebound, with Brent crude up slightly on Friday morning. If buyers can maintain this momentum, oil could close the week with a modest gain, but sentiment in the energy sector remains fragile.
Overall, Friday starts with a cautious rebound attempt, but given the recent downside pressure on indices, the key question is whether this is just another short-lived correction or the beginning of a stabilization phase. Traders will be watching today's consumer sentiment data closely for further market direction.