Markets have been quite choppy over the last several trading sessions. This past week saw a broad recovery in risk trends with sentiment improving on the heels of simmering bond market volatility. The Dow Jones Industrial Average jumped 4% to a fresh record high and the Nasdaq rebounded 2% while the S&P 500-derived VIX Index, or fear-gauge, snapped sharply lower. Popular cryptocurrencies like Bitcoin and Ethereum extended toward their respective all-time highs.
Congress cementing President Biden’s $1.9-trillion covid aid package, which includes $1,400 stimulus checks set to be dished out as early as this weekend, likely contributed to investor optimism. Not to mention, the OECD upgraded its 2021 global GDP growth forecast by 1.4% thanks to a huge upward revision in US GDP to 6.5% from 3.2% projected last December.
of clients are net long.
of clients are net short.
EUR/USD price action gained ground as the Euro firmed in the wake of the ECB meeting and capitalized on a generally softer US Dollar. The Canadian Dollar was a top performer on the week with USD/CAD cratering 177-pips to its weakest level since early 2018 helped fueled by robust jobs data. Broader US Dollar downside was slightly offset by strength against its Japanese Yen peer with USD/JPY popping 66-pips as the yield on ten-year Treasuries pushed above 1.6% to a new pandemic high. As for major commodities, precious metals like gold and silver caught a relief bounce, though crude oil prices lost upward momentum.
Looking to the week ahead, our central bank calendar highlights upcoming announcements from the Federal Reserve, Bank of England, and Bank of Japan among others. The Fed meeting will likely be the main event seeing that FOMC officials are expected to release updated economic projections and could comment on rising Treasury yields.
Taking a glance at our economic calendar reveals additional high-impact event risk on deck such as the release of monthly US retail sales as well as inflation data out of Canada and the Eurozone. China is slated to release key economic indicators on Monday, 15 March at 02:00 GMT, which could also be noteworthy in light of resurfacing trade tensions. What else are traders watching out for in the week ahead?
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