Market Wrap and Week Ahead - w/c March 11th

Recent commentary from ECB President Christine Lagarde and Federal Reserve Chairman Jerome Powell suggest that both central banks are looking to start a series of interest rate cuts in June.

In his testimony to the Senate Banking Committee on Thursday, Fed Chair Jerome Powell indicated that interest rates could soon be on the way down. ‘If the economy does as expected, we think carefully removing the restrictive stance of policy will begin over the course of the year’, Powell said Thursday.

Friday’s latest US Jobs Report also showed the closely watched unemployment rate rise unexpectedly from 3.7% to 3.9%, while average earnings slowed further.

US Dollar Falls Further After US NFP Beat But January Number Revised Lower

Also Thursday, post-policy decision commentary from ECB’s Lagarde also pointed to the end of H1 as an appropriate time to start cutting borrowing costs.

‘We are making good progress towards our inflation target and we are more confident as a result…But we are not sufficiently confident. We need clearly more evidence and more data. We will know a little more in April, but we will know a lot more in June.’

Earlier, ECB staff projections cut inflation and growth forecasts for the next three years.

Euro (EUR/USD) Drifts Marginally Lower, ECB Leaves All Policy Rates Unchanged

In Japan, recent commentary from Bank of Japan officials suggests that if the current round of wage negotiations produce the expected results, then the BoJ may well start to hike interest rates soon, with the markets already pricing in a 60%+ chance of a hike this month.

High Importance Economic Releases and Events – w/c March 11th.

There are a few important data releases that can inject a further shot of volatility into a range of asset classes. The standout next week is the latest US inflation report, followed by UK employment and growth data.

Learn how to trade economic data releases and events with our complimentary guide

Gold, Nasdaq 100, Nvidia

This week saw gold continue to push higher and make a couple of fresh record highs. The precious metal is being driven ever higher on a combination of increased rate cut expectations, Chinese demand, and safe haven buying.

Gold Daily Price Chart

US indices pushed marginally higher over the week although Friday’s sell-off, noticeable in the Nasdaq, is worth taking note of. Friday’s sell-off, while damaging, still leaves Nasdaq in a bullish trend with the indices making an unbroken series of higher lows and higher highs over the past five months.

Nasdaq 100 Daily Chart

One company that bucked its recent bullish trend, Nvidia, turned sharply lower on Friday. Chip giant Nvidia is one of the largest quoted companies and has an oversized impact on various US indices. It will be worth following Nvidia next week to see if Friday’s move was an aberration.

Nvidia Daily Chart

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Technical and Fundamental Forecasts – w/c March 11th

British Pound Weekly Forecast: GBPUSD Looks Overextended at 7-Month High

The Pound looks set to start a new trading week at more-than seven-month highs against a United States Dollar broadly weakened by expectations that interest-rate cuts are surely coming.

Euro Weekly Forecast: Gains Look Vulnerable in the Week Ahead

This article explores the euro’s fundamental and technical outlook, examining pivotal factors that may influence price movements in the upcoming week.

Gold Price Outlook – Rally Looks Set to Continue on Positive US Rate Cut Backdrop

The recent record-breaking gold rally seems likely to continue as US interest rate cuts are now seen starting at the end of H1

US Dollar Forecast: US CPI to Spark Next Big Move - EUR/USD, USD/JPY, GBP/USD

February's U.S. inflation data is poised to ignite heightened market volatility in the upcoming week, playing a pivotal in shaping the near-term outlook for the U.S. dollar.

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