US Markets Consolidate Ahead of a Big Week – Dow Off 0.2%
It was a relatively muted trading day on Friday, as expected, with investors digesting recent updates and looking ahead to another key trading week. The Dow dipped 0.20%, the S&P closed flat, and the Nasdaq gained just 0.12% in lacklustre trading. Currencies traded in relatively tight ranges, with the dollar edging higher.
There were, however, some notable moves in treasuries and commodities. The US 2-year yield added 5.4 basis points, rising to 4.245%, while the benchmark 10-year yield gained 6.9 basis points, reaching 4.397%. Oil prices pushed higher again as traders evaluated EU sanctions on Russia, with Brent crude adding 1.47% to $74.49 and WTI rising 1.81% to $71.29. Gold saw another drop from recent highs, losing 1.21% on the day to close the New York session at $2,649.65.
Central Bank Focus This Week
This week is set to be significant for financial markets, with key updates from some of the world’s major central banks. The Federal Reserve’s meeting, concluding late in the US trading day on Wednesday, will undoubtedly be the major focus. However, with a 25-basis-point cut already well priced in, the outcome could prove to be a non-event.
The Bank of England and the Bank of Japan are also due to update markets on interest rates. Both are expected to keep rates on hold, and these meetings may have a greater potential to move markets than the Fed’s announcement. FX traders anticipate significant activity around these events, with any surprises likely to come from the latter two meetings. Consequently, stronger moves in the pound and the yen may be seen as the week progresses.
Busy Day to Kick Off a Busy Week
Monday features an unusually packed calendar to start what could be a pivotal week for financial markets. A raft of Flash Manufacturing and Services PMI figures is due across all sessions, with data coming from Australia, France, Germany, the EU, the UK, and the US.
The Asian session includes several key Chinese updates, with Industrial Production and Retail Sales data in the spotlight. In the European session, ECB President Christine Lagarde is scheduled to speak, followed later by Bank of Canada Governor Tiff Macklem, who will address an audience in Vancouver.
