Markets Week Ahead: US Indices, Gold Recover Losses After US Inflation Fears

Inflation in the US remains sticky at both producer and consumer level but US indices are seemingly ignoring these price pressures and remain near recent multi-year highs.

US inflation releases this week helped push US Treasury yields, and the greenback, higher this week as financial markets continue to re-price US rate cut expectations. Both US CPI and PPI data came in above forecast, pushing the US dollar higher, while US indices took a hit early in the week. The moves were mostly reversed later in the week to leave most markets little changed at the close on Friday.

US Dollar Index Daily Chart

The mid-week volatility can be clearly seen in the daily VIX chart with a sharp post-US CPI rally on Tuesday. Again this move was reversed during the rest of the week.

VIX Daily Chart

While US indices remain at, or near to, recent multi-year highs, one index that has underperformed global rivals, the FTSE 100, had a very strong week on the back of supportive UK economic data. The UK 100 also benefitted from the slightly stronger US dollar with around 70% of company earnings made overseas.

UK Recession Confirmed by Dismal Q4 GDP Data

UK Retail Sales Soar in January to Erase December Slump

British Pound Update – UK Inflation Unchanged in January, Rate Cut Expectations Trimmed

FTSE 100 Daily Chart

Gold also trimmed losses this week, helped in part by the precious metal being heavily oversold, according to one technical indicator.

Gold (XAU/USD) Picking Up a Small Bid as Oversold Conditions Begin to Clear

Technical and Fundamental Forecasts – w/c February 19th

British Pound Weekly Forecast: Data-Drought Could See Further GBP/USD Slips

The Pound has been quite resilient through some conflicting UK economic news but there’s much less on the coming week’s slate.

Euro Weekly Outlook: EUR/USD, EUR/GBP and EUR/JPY – Analysts and Forecasts

The ECB is looking increasingly likely to be the first major central bank to start cutting interest rates, and this will affect the value of the single currency.

Gold, Silver Forecast: Metals Challenged by Stronger USD, Delayed Rate Cuts

Hotter-than-expected PPI figures on Friday added to stubborn CPI data on Tuesday, setting up the dollar for a positive week. Weekly and daily charts conflict for gold and silver.

US Dollar Forecast: Bullish Bias Prevails, Setups on EUR/USD, USD/JPY, USD/CAD

This article scrutinizes the technical outlook for three major U.S. dollar pairs: EUR/USD, USD/JPY, and USD/CAD. Within the piece, we assess market sentiment and examine essential price levels that traders should have on their radar in the upcoming days.

https://www.dailyfx.com/news/markets-week-ahead-us-indices-gold-recover-losses-after-us-inflation-fears-20240218.html