Overall global market sentiment ended on an upbeat this past week. On Wall Street[1], the Dow Jones, S&P 500[2] and tech-heavy Nasdaq[3] Composite closed +0.88%, +0.75% and +0.63% respectively. In Europe, the DAX 30[4] wrapped up +1.11%. Sentiment was mixed in the APAC region, with the Nikkei 225[5] finishing -0.71% as the ASX 200[6] closed +1.61%.
A mixed US non-farm payrolls report on Friday sent Treasury yields lower as the markets trimmed Fed tapering expectations. That pressured the US Dollar[7]. Currencies like the Australian Dollar[8] and Japanese Yen[9] outperformed the Greenback. The latter managed to hold some ground against the Euro[10] and British Pound[11]. Anti-fiat gold prices[12] weakened while crude oil[13] continued pushing higher.
In the week ahead, the Canadian Dollar[14] and Euro are eyeing the Bank of Canada and European Central Bank respectively. The BoC has been one of the early movers amongst developed central banks to taper asset purchases. This could leave the Loonie[15] on the offensive if the central bank continues to outline its plans to do more of the same in the near term.
In contrast to the BoC, the ECB may keep its tone to maintain ultra-loose policy, with emergency asset purchases to continue at around EUR85 billion during the third quarter. This may leave the Euro vulnerable. The US CPI report on Thursday will also be closely watched as core inflation is expected to clock in at its fastest since early 1993.
That may keep the debate open to how soon the Fed could start tapering its asset purchases.
