Market sentiment mostly improved this past week as all eyes were on the tech-heavy Nasdaq[1] Composite as it soared about 3.7%. Earnings from Facebook, Amazon, Apple and Google – part of the FAANG group – smashed expectations. The Dow Jones Industrial Average[2] was left behind, ending the week -0.16% as the S&P 500[3] rose +1.73%. The haven-linked US Dollar[4] sank further.
Meanwhile the Federal Reserve[5] left interest rates unchanged at near-zero levels with aggressive measures of unconventional stimulus to remain in place for the foreseeable future. A combination of these developments may have kept markets jubilant despite what has been rising cases of the coronavirus and deaths around the world. The government ended the week without a stimulus deal.
Earnings season remains in play as certain financial, automotive, energy, media, healthcare and other businesses report. From developed nations, the Reserve Bank of Australia and Bank of England will have their next monetary policy announcements ahead. But the focus for the Australian Dollar[6] and British Pound[7] may be elsewhere with central banks in a dovish hold for now.
At the end of the week, all eyes will turn to the next jobs report[8] from the world’s largest economy to continue gauging overall growth expectations. The Canadian and New Zealand Dollars will also have to contend with local jobs data. Lately, precious metals – such as gold[9] and silver[10] – have been rallying aggressively. Will these trends continue?
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Fundamental Forecasts:
Australian Dollar Outlook Hinges on Covid-19 Cases Ahead of RBA Rate Decision[12]
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