This week concludes with several significant market updates: the ECB maintains its key rate, while gold surges towards new record highs. But that's not all. In our weekly digest, we also review other news. Take a couple of minutes and read our overview!
European Central Bank holds interest rates at 4% in contested decision
The European Central Bank (ECB) hinted at a possible interest rate cut at its upcoming June meeting, following Thursday's decision to maintain rates at record highs. ECB President Christine Lagarde revealed that while the benchmark deposit rate would remain at 4 per cent for now, there was dissent among policymakers, with a minority advocating for an immediate cut.
The ECB's shift in language suggests openness to reducing rates if inflationary pressures stabilize, updated forecasts align, and past rate hikes bolster confidence in reaching the 2 per cent target.
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Amazon and Alphabet on brink of $2 trillion market cap
Amazon.com and Alphabet, parent company of Google, edged closer to the elusive $2 trillion market capitalization milestone.
Amazon's stock rose by 1.8% to $189.31, pushing its market cap to $1.97 trillion, while Alphabet's shares climbed 1.9% to $159.10, potentially securing a record close and a market cap of $1.99 trillion. Among U.S. firms, only Apple, Microsoft, and Nvidia have breached the $2 trillion threshold.
As Apple surged by 3.8% to $174.10, Microsoft by 1.3% to $428.86, and Nvidia by 3.4% to $899.95, Alphabet achieved a $1 trillion market cap 936 trading days ago, while Amazon crossed it 1,053 trading days ago.
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Gold price hits a record high to near $2,390
Gold prices surged to a record high nearing $2,390 during the early Asian trading session on Friday. Market sentiment leaned heavily towards an impending interest rate cut by the US Federal Reserve (Fed), propelling demand for the precious metal. Furthermore, heightened geopolitical tensions in the Middle East and continued gold purchases by the Chinese central bank contributed to the surge in safe-haven flows. Despite concerns over recent inflation reports, analysts anticipate the Fed to maintain its projection of three 25-basis points rate cuts this year.
The People's Bank of China (PBoC) has been consistently adding to its gold reserves for the 17th consecutive month, reflecting Chinese investors' growing interest in gold as an alternative asset amid uncertainties in the property sector and equities markets.
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EUR/USD trades with a negative bias below 1.0750
The EUR/USD pair traded with a negative bias near 1.0728. The slight rebound in the US Dollar (USD) amid increasing speculation of a Federal Reserve (Fed) rate cut in September exerted pressure on the major currency pair. Following the European Central Bank's (ECB) decision to maintain interest rates at record highs on Thursday, with indications of a potential rate cut in June, market sentiment remained cautious.
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This concludes our weekly recap. Have a great weekend and see you next week! 👋
