STOCKS
Following mostly negative trading earlier in the week, US stocks rebounded on Thursday from a sell-off triggered by renewed worries about stubbornly high inflation, suggesting interest rates may stay high for a while. The Nasdaq Composite rose 1.7% to close at a record due to a rally in tech shares. Amazon climbed to an all-time high, topping its prior high set in 2021. The S&P 500 rose 0.7%, shedding just 0.1% for the week. Bucking the trend, the Dow Jones Industrial Average edged down by less than 0.1%. For the week, the Dow is down 1.1% and the Nasdaq is up 1.2% so far. In Asia, equities were mostly lower on Friday, with MSCI's broadest index of Asia-Pacific shares outside Japan slipping 0.67% to trim its gains for the week to less than 0.2%. Japan was the only real bright spot in the region, with the Nikkei 225 up 0.23%. South Korea’s Kospi shed 0.9% after the Bank of Korea held its benchmark rate unchanged at 3.50%.
CURRENCIES
The US dollar has been rallying since Wednesday in reaction to strong US inflation data. The CPI rose 3.5% on a yearly basis in March to come in above the market expectation of 3.4%. On a monthly basis, the CPI and the core CPI both rose 0.4%. Against this backdrop, the greenback rebounded aggressively from the two-week lows to get back above the 105.00 figure. The dollar climbed to fresh five-month tops in the 105.70 area, preserving gains so far. On Thursday, the ECB held interest rates steady, as expected, but gave a clear signal of an upcoming rate cut. In his recent comments, ECB's Muller said slower inflation rises the chances of a June rate cut. Dovish hints from the European Central Bank added to upbeat tone surrounding the dollar, pressuring the single currency. Should the greenback stay above 105.50 in the near term, the 106.00 level will come into the market focus next. On the downside, the dollar needs to hold above 105.30 in order to stay afloat.
OIL
Oil prices have been directionless this week, looking to finish unchanged. Brent crude has settled in a relatively tight trading range these days, struggling to attract sustained buying pressure amid worries about inflation. Brent crude briefly climbed above the $91 handle at the start of the week before retreating. Oil futures have settled around the $90 figure since then, trading in positive territory on Friday after yesterday’s dip. On the weekly timeframes, oil looks directionless after two weeks of solid gains. Still, the futures continue to hold near six-month highs registered earlier this month just below the $92 figure. In industry news, according to the US EIA latest weekly report, US commercial crude oil inventories increased by 5.8 million barrels from the week ending March 29 compared with a build of 3.2 million barrels for the previous week. Earlier, oil was pressure by reports that Hamas and Israel will finally agree on a ceasefire. However, as hopes of a ceasefire in the Middle East began to dampen, Brent managed to shrug of some of the selling pressure.
GOLD
Gold prices rallied to fresh all-time highs above $2,400 on Friday, staying close to the upper end of the extended trading range despite overbought conditions. The XAUUSD pair looks resilient in early European trading ahead of the weekend, with prices looking ready to extend the ascent in the near term. Still, the downside potential persists at this stage, as investors may take profit more aggressively after the spike. In recent deals, the XAUUSD pair was changing hands above $2,413. On the weekly timeframes, the technical picture stays positive, with wider picture remaining upbeat after reaching fresh all-time highs. On the upside, the immediate significant target is now represented by the $2,430 zone, followed by $2,450. Downside risks are limited while above the $2,300 region.
CRYPTO
The bitcoin price retreated earlier in the week to attract some renewed demand eventually. At the start of the week, the ascent was capped by the $72,700 zone. During the subsequent retreat, the BTCUSD pair dipped below the $70,000 psychological level to fins support around $67,600. Bitcoin price has increased 65% so far this year. The US Securities and Exchange Commission’s approval of spot Bitcoin ETFs was the biggest driver of bitcoin’s gains so far in 2024. Volatility in the cryptocurrency market could remain elevated ahead of a halving event that is anticipated to take place on April 20. The event is set to halve the rate at which new bitcoin is mined, potentially tightening future supply of the token. Halving would reduce the supply of bitcoin by about 450 a day. At this stage, the digital coin needs to hold above $70,000 in order to refrain from a deeper decline. Otherwise, BTCUSD may get back below the $68,000 zone. A decisive break below this level would pave the way to a deeper retreat in the coming days.