Category: US

Asset Summary – Friday, 14 March

GBPUSD is demonstrating bullish momentum, primarily driven by a weakening US dollar stemming from economic anxieties and tariff implications. This upward pressure is compounded by the perception that the Bank of England is likely to maintain higher interest rates for a sustained period, diminishing expectations for future rate cuts. Furthermore, upcoming UK GDP data and forecasts from the Office for Budget Responsibility will provide crucial insights into the UK’s economic health, potentially further influencing the pound’s trajectory against the dollar. Traders are closely monitoring these releases to gauge the underlying strength of the British economy and its ability to support a stronger currency.

EURUSD faces a mixed outlook. The euro’s recent dip below $1.09 reflects concerns over escalating trade tensions, particularly the potential for significant tariffs on EU alcoholic beverages imposed by the US, which could negatively impact the Eurozone economy. Geopolitical risks stemming from developments in Ukraine further weigh on investor sentiment. However, the euro is finding support from Germany’s proposed €500 billion infrastructure and defense spending package, which suggests potential fiscal stimulus and increased economic activity. Moreover, indications that the European Central Bank may be nearing the end of its easing cycle are providing further upward pressure, creating a complex and potentially volatile trading environment for the pair.

DOW JONES experienced a decline following renewed trade war anxieties triggered by tariff threats, leading to a notable drop in value. While US stock futures indicate a potential rebound, the overall market sentiment remains fragile. The Dow’s performance is further influenced by softer-than-anticipated producer price inflation data, adding to existing economic uncertainty. The index’s trajectory will likely depend on developments in trade negotiations and the broader economic outlook.

FTSE 100 experienced a decline, closing lower as anxieties surrounding the potential impact of a US trade war on global economic expansion weighed on market sentiment. While some companies like Halma and AstraZeneca saw gains due to positive company-specific news, other sectors such as property development faced significant losses. Diageo’s performance was mixed, impacted by potential tariffs on EU goods but still faring better than its European counterparts, suggesting its limited exposure to the EU provided some resilience. The overall downward trend suggests that broader macroeconomic concerns are currently overshadowing positive individual company performance, indicating potential continued volatility.

GOLD is experiencing upward price pressure, reaching record highs and anticipating further gains. This is influenced by a combination of factors: global trade tensions instigated by the US, which are increasing investor uncertainty and driving them towards safe-haven assets; indications of softening inflation in the US, bolstering the likelihood of interest rate cuts by the Federal Reserve, making non-yielding assets like gold more attractive; and consistent demand from exchange-traded funds and central banks, particularly China, which are adding to the metal’s value through ongoing purchases. All of these elements are contributing to a positive outlook for gold’s price.

Asset Summary – Thursday, 13 March

GBPUSD is exhibiting a bullish outlook as the pound benefits from a weaker dollar and anticipation of sustained high interest rates in the UK. Reduced expectations for Bank of England rate cuts into 2025 are bolstering the currency. Upcoming GDP data and economic forecasts from the Office for Budget Responsibility will be crucial in shaping investor sentiment and potentially influencing the pair’s trajectory. Positive economic signals from the UK could further strengthen the pound against the dollar, while any negative surprises might trigger a correction.

EURUSD is likely to experience increased volatility and potentially upward pressure. The possibility of a ceasefire in Ukraine is a positive development that could reduce risk aversion and support the euro. However, escalating trade tensions between the US and the EU, specifically the imposition of tariffs and retaliatory measures, introduce uncertainty and could negatively impact the currency pair in the long run. The expectation of increased European defense spending and a potential shift in the ECB’s monetary policy stance, moving away from easing, could further contribute to euro strength, but any negative surprises on either front can swiftly change the EURUSD dynamic.

DOW JONES experienced a slight dip, continuing a three-day downward trend, even as broader market indices like the S&P 500 and Nasdaq Composite saw gains. While technology stocks fueled a market rebound, the Dow’s performance suggests it may not be fully benefiting from the tech sector’s strength. Factors such as newly implemented steel and aluminum tariffs and subsequent retaliatory tariffs from Canada could be weighing on the Dow, potentially impacting companies reliant on these materials or trade with Canada. The mixed signals, with positive momentum in tech countered by tariff concerns, indicate uncertainty for the Dow’s near-term direction.

FTSE 100 experienced an increase in value, driven by positive reactions to lower-than-anticipated US inflation figures, which tempered fears of aggressive monetary policy tightening. This positive sentiment outweighed concerns related to international trade disputes, particularly potential tariffs. Gains were concentrated in specific sectors, including aerospace (Rolls-Royce), banking, pharmaceuticals (AstraZeneca), and energy (Shell and BP), while a flight to safety also benefited gold miners like Fresnillo. The UK government’s stance on trade relations with the US further contributed to market optimism, suggesting a potential buffer against negative trade-related impacts.

GOLD’s price is being supported by ongoing trade disputes, which are driving investors towards the perceived safety of the metal. President Trump’s threats of new tariffs and possible copper trade protections are intensifying these concerns. Simultaneously, lower-than-expected US inflation figures are increasing speculation that the Federal Reserve may ease monetary policy, further benefiting gold. However, the future impact of tariffs on inflation remains uncertain, posing a risk that could reverse the current upward trend.

Asset Summary – Wednesday, 12 March

GBPUSD is showing potential for continued strength, as dollar weakness stemming from US economic anxieties and tariff implications provides upward pressure. Simultaneously, expectations of sustained high interest rates in the UK, driven by reduced anticipation of Bank of England rate cuts, further bolsters the pound. Market participants will be carefully analyzing forthcoming UK GDP data and forecasts from the Office for Budget Responsibility, as these economic indicators could either solidify or challenge the current positive outlook for the currency pair. A positive surprise in economic performance could drive GBPUSD higher, while disappointing figures could lead to a correction.

EURUSD is exhibiting bullish momentum as the euro benefits from increased government spending initiatives across major Eurozone economies, particularly Germany, France, and Italy, signaling a commitment to economic growth. The European Central Bank’s indication of potentially nearing the end of its loosening cycle further strengthens the euro’s position. Meanwhile, concerns surrounding economic growth in the United States are weighing on the dollar, exacerbating the upward pressure on the EURUSD exchange rate. This combination of factors suggests a continuation of the euro’s upward trend against the dollar.

DOW JONES faces a potentially volatile trading day as investors react to upcoming consumer inflation data and its implications for Federal Reserve policy. While stock futures indicate a possible rebound, recent declines across major indexes, including a significant drop in the Dow itself, suggest underlying weakness. Concerns about tariffs, particularly President Trump’s decision to increase tariffs on Canadian steel and aluminum, add further pressure. Losses in major tech companies and across all S&P 500 sectors highlight broad market unease, although Ontario’s decision to pause its electricity surcharge offers a small glimmer of hope. The Dow’s performance will likely hinge on the inflation data and the market’s assessment of the Fed’s response in light of the ongoing trade tensions.

FTSE 100 is facing downward pressure as global trade tensions escalate, particularly between the U.S. and Canada, triggering investor anxiety. The imposition and threat of tariffs raise concerns about the potential impact on international trade and economic growth, leading to market declines. While positive corporate news, such as Persimmon’s strong results and expansion plans, offers some support, broader economic worries surrounding slowing retail sales growth are likely to continue to weigh on the index’s performance.

GOLD is finding support from its safe-haven status as global trade uncertainties and recession fears persist, stemming from potential US tariff policies. A weaker US dollar also contributes to its positive performance. However, the easing of geopolitical tensions, specifically regarding US-Ukraine-Russia relations, could temper further gains. Looking ahead, the upcoming US CPI data will be crucial, as it will influence the Federal Reserve’s interest rate decisions and, consequently, the direction of gold prices.

Asset Summary – Tuesday, 11 March

GBPUSD is exhibiting positive momentum, driven by a confluence of factors favoring the pound. The dollar’s weakness, fueled by US economic uncertainty and tariff implications, is providing a tailwind. Furthermore, the pound is benefiting from expectations of sustained high UK interest rates, as markets anticipate less aggressive rate cuts by the Bank of England than previously projected. Upcoming UK GDP data and the Office for Budget Responsibility’s economic forecasts will be closely monitored for further clues about the UK’s economic trajectory, and may amplify or dampen the current bullish sentiment surrounding the GBPUSD pair.

EURUSD is exhibiting bullish momentum driven by several factors. Increased government spending commitments in major Eurozone economies, particularly Germany, are fueling expectations of stronger economic growth within the bloc. This fiscal stimulus, coupled with potential joint EU funding initiatives, reinforces the euro’s appeal. The European Central Bank’s recent policy signals, suggesting a potential slowdown in monetary easing, further support the currency. Simultaneously, growing economic anxieties in the United States are weighing on the US dollar, amplifying the upward pressure on the EURUSD exchange rate.

DOW JONES experienced significant volatility, ultimately closing down 200 points. Initial losses were tempered by news regarding a potential easing of trade tensions between the US and Canada, specifically related to steel and aluminum tariffs. However, the negative impact of declining airline stocks, particularly Delta’s reduced earnings outlook stemming from weakened US demand, weighed heavily on the index. The performance of travel-related stocks such as Disney and Airbnb further contributed to the downward pressure. Investors are now awaiting the upcoming CPI report, which is expected to provide further guidance for market direction.

FTSE 100 experienced a significant decline, falling to its lowest point in months, primarily driven by escalating global trade war anxieties. New tariffs imposed by the U.S. on Canadian steel and aluminum triggered market uncertainty and negatively impacted investor sentiment. While positive news from Persimmon, regarding increased profits and expansion plans, offered some support, it was insufficient to offset the broader market concerns. Furthermore, slower retail sales growth in February added to the negative pressure, contributing to the overall decline in the index’s value.

GOLD’s price experienced a significant surge, reaching approximately $2,900 per ounce, a movement largely attributed to a weakening U.S. dollar and an increase in safe-haven demand. Heightened apprehension regarding the U.S. economic future, fueled by escalating trade disputes and presidential comments hinting at a possible economic slowdown, bolstered gold’s appeal as a secure investment. The complex interplay of tariff impositions and retaliatory measures between the U.S., Canada, and China further intensified economic uncertainty. While the Federal Reserve acknowledged these uncertainties, their cautious approach to interest rate cuts adds another layer of complexity. Market participants are keenly awaiting upcoming U.S. inflation data, as this information could significantly impact the Federal Reserve’s future monetary policy decisions, further influencing gold’s price trajectory.

Asset Summary – Tuesday 11 March, March

GBPUSD: he GBPUSD is likely to remain supported near its recent highs due to a confluence of factors. Dollar weakness stemming from concerns about the US economy and tariffs provides a general tailwind. More specifically, expectations that the Bank of England will maintain higher interest rates for longer are making the pound more attractive to investors, as it implies a higher return on investment compared to other currencies. Upcoming UK economic data, particularly the monthly GDP figures and the Office for Budget Responsibility’s forecasts, will be closely scrutinized and could further influence the pair’s direction depending on whether they reinforce or undermine the current positive sentiment surrounding the pound.

EURUSD: he recent developments suggest a positive outlook for the EURUSD. The euro’s strength, supported by Germany’s fiscal policy shift and increased defense spending, provides upward pressure on the currency pair. While the ECB’s rate cut is typically a negative catalyst, their acknowledgment of easing restrictive policy, coupled with expectations of only limited further cuts, suggests a controlled and potentially less impactful monetary policy stance. This scenario favors a continuation of the euro’s relative strength against the dollar, potentially leading to further gains for the EURUSD. Traders should monitor upcoming economic data releases and ECB communications for confirmation of this trend.

US30: iven the information, the outlook for the US30 appears bearish. The decline in US stock futures, coupled with the significant selloff across major indices, particularly in megacap technology stocks which heavily influence the index, suggests a potential downward trajectory for the US30. Growing recession concerns, driven by factors like presidential statements and tariff implications on inflation, further dampen investor confidence. The negative revision of profit and sales forecasts by Delta Air Lines and its subsequent stock tumble highlight concerns regarding economic demand, which could cascade to other sectors included in the US30. Investors should be cautious and consider potential short positions or hedging strategies.

FTSE 100: he FTSE 100 experienced a significant drop, closing nearly 1% lower, indicating negative trading sentiment. Investor anxiety was heightened by fears of a global economic slowdown, fueled by trade tariffs and President Trump’s recession concerns. Specific sectors, including mining and financials, were heavily impacted, with prominent companies like Entain and Rolls-Royce suffering substantial losses. Overall, the trading day reflected a broad market downturn driven by macroeconomic anxieties and their potential impact on corporate performance.

Gold: he confluence of factors detailed suggests a positive outlook for gold. A weaker U.S. dollar generally makes gold more attractive to investors holding other currencies. More significantly, growing anxieties surrounding the U.S. economy, fueled by trade tensions and the President’s own statements about a “period of transition,” are driving safe-haven demand for gold, a traditional store of value during times of uncertainty. Despite the Federal Reserve’s cautious approach to interest rate cuts, the underlying economic concerns and the ongoing trade disputes are likely to continue supporting gold prices, with upcoming inflation data potentially further influencing the Fed’s actions and, consequently, gold’s trajectory.