The upcoming week in the markets is set to be full of important economic data and events, including key announcements such as UK employment data, US inflation numbers, Australian employment figures, and US Producer Price Index (PPI) data. In addition to these reports, investors will be closely watching the latest monetary policy decisions from the Federal Reserve and the Bank of Japan.
The Federal Reserve is expected to keep its policy levers unchanged, but market participants will be paying close attention to the release of the latest summary of economic projections for any hints about future policy moves. Similarly, the Bank of Japan is likely to maintain its current rates but may signal a shift towards tightening monetary policy by allowing bond yields to drift higher. This could have an impact on currency pairs like USD/JPY in the coming days.
Following the release of the latest US Jobs Report (NFPs), the US dollar saw a strong rebound, erasing all losses from earlier in the week and pushing towards the 105.00 level. The upcoming FOMC meeting will be a key driver of market action in the weeks ahead, with the US dollar index currently in a downtrend but showing signs of a potential reversal.
In the precious metals market, gold prices took a hit on Friday after reports that China had stopped buying gold, leading to a sharp drop in prices. The release of the US Jobs Report further weighed on gold as US Treasury yields rose, pushing the precious metal towards a support level at $2,280/oz. Investors will be watching closely to see if this level holds and attracts buyers back into the market.
Meanwhile, the Nasdaq 100 continues to hit record highs, driven by companies like Nvidia, which recently surpassed Apple in terms of market capitalization. While the index remains in an uptrend, there are concerns about the concentration of a few large companies driving the gains. Short-term sell-offs could present buying opportunities for investors.
Bitcoin, on the other hand, is facing resistance at the $72k level but remains in a positive trend overall. A break above the May 21 high could pave the way for a new all-time high for the cryptocurrency.
Overall, the markets are poised for a week of volatility and potential opportunities for investors, with a mix of economic data releases and central bank decisions driving price action across different asset classes. Traders will need to stay vigilant and adapt to changing market conditions to navigate the week ahead successfully.
