This week, traders eye the US Core PCE (Personal Consumption Expenditures) on Friday. The Core PCE, which excludes volatile food and energy prices, is a key inflation gauge the Federal Reserve uses to guide interest rate decisions. A strong print could fuel Fed hawkish bets, lifting the dollar, while a weaker one may ease rate hike concerns. Thursday’s GDP revision and durable goods data will test US economic strength, with downward revisions potentially sparking equity sell-offs.
Globally, inflation data takes center stage: Australia’s CPI may push the RBA toward tightening, boosting the AUD, while Japan’s persistent inflation could pressure the BOJ, lifting the JPY. China’s PMI and the FICS Summit could influence market sentiment, but geopolitics and US trade rhetoric remain unpredictable.
Markets are navigating a sharp economic split, with the US showing strong job growth while the UK struggles with weak employment and sluggish GDP. This BoE-Fed policy divergence fuels volatility in sterling, while eurozone confidence falters amid trade disruptions. Meanwhile, Japan’s rising inflation strengthens bets on BOJ policy shifts, and emerging markets tread carefully, watching dollar moves and China’s stimulus efforts.
Gold’s rally to record highs reflects mounting geopolitical risks, central bank buying, and fiscal concerns. After a 7.6% gain in January, analysts predict further upside if trade tensions escalate or delayed rate cuts shake equity markets.
Gold Hits Record Highs
Gold prices reached new all-time highs, driven by geopolitical tensions, trade uncertainty, and a weaker USD. A breakout above $2,940 targets $3,030, though overbought signals suggest short-term consolidation. The Fed's cautious stance on inflation and tariff volatility continues to support gold as a safe-haven hedge.
Nasdaq Surges on AI Optimism
The Nasdaq-100 hit record highs above 22,000, fueled by AI optimism and strong tech earnings. A breakout signals a target of 23,000, but overextended valuations and hawkish Fed minutes pose risks. Key support lies at 20,500, with semiconductor stocks like Nvidia and Broadcom leading the charge. Profit-taking near 22,200 could precede more upside.
Sterling Bulls Losing Steam?
Sterling hit a two-month high at 1.2650, boosted by sticky UK inflation and delayed BOE rate cuts. Bullish momentum targets 1.2772, but stagflation risks and a resilient USD may limit gains, with support at 1.2450. Upcoming UK PMI data could test the pair’s strength amid global trade uncertainty.
Stay tuned to key market moves—geopolitics, inflation, and tech trends are in focus. Follow our daily updates to stay ahead of the game!
