After the Storm
Last week we had a busy week with Central banks. Decisions from the Fed, BoE and SNB kept the markets busy looking at the forward guidance.
The Fed kept rates unchanged as expected but the BoE and SNB keeping rates on hold though not a surprise it now seems we have reached the end of the rate hike cycle and are now entering 'Higher for Longer' territory.
The Dollar had a relatively quiet week with marginal gains but remains in a strong upward trend. The DXY rose just 0.2% to close just shy of 105.60.
Euro after last week’s troubles had a quiet week as the market focus was on the Dollar. Eurozone CPI was weaker continuing the general trend of slowing data from the bloc. The Euro ended the week 0.2% lower.
GBP continued its downward trend. A couple of months ago we felt that the GBP was most likely to gain from diverging rates, but it now seems the BoE have for now reached the top of the rate cycle. Continuing data showing the UK economy slowing is putting further pressure on the GBP and we now see this downtrend most likely to continue.
Commodity currencies had a second up week on the trot outperforming the other majors. This was against a backdrop of rising yields and a general risk off market. AUD and CAD only had small gains, but NZD rallied 1%.
Oil effectively paused for a week with a small loss on the week. Oil remains in a strong upward trend which with supply issues we only see continuing over the coming weeks.
The week ahead is slower on data, but the market will be watching the yields as they look t breakout. Any confirmation could lead to further risk off especially in equities.
Weekly Majors Market Performance
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