Stocks on Wall Street[1] mostly ended on an upbeat this past week, with the S&P 500[2] and Dow Jones Industrial Average rising about +0.71% and +0.87% respectively. It was the tech sector that underperformed, with the Nasdaq[3] Composite falling about -0.09%. An initial push higher in Treasury yields helped bolster cyclical shares, but that narrative slightly reversed on Friday.
The worst Michigan consumer sentiment reading since 2011 casted a shadow of doubt over the health of the US economic recovery despite a recently rosy non-farm payrolls report. The US Dollar[4] took a hit, underperforming its major counterparts. The drop in global yields on Friday was relatively beneficial to the Japanese Yen[5], which outshined its peers to wrap up the week.
Gold prices[6] were also quick to take advantage of a weaker US Dollar and falling government bond yields, further reversing a flash crash experienced at the beginning of last week. Growth-linked crude oil prices[7] remained under pressure. The ongoing rise in Covid cases amid the more contagious Delta variant is denting global growth expectations.
The New Zealand Dollar[8] may be a closely watched currency next week as the RBNZ is anticipated to deliver a 25-basis point rate hike, a first from the developed world since the onset of the pandemic. Traders will be keen to see how far the central bank could take monetary tightening in the near-term, which also leaves some room for disappointment if the pace will be much slower.
All eyes will also shift to the FOMC[9] meeting minutes, where the central bank could reiterate its confidence in the broader economic outlook. If such an outcome sends Treasury yields higher again,
