Futures tracking the Dow Jones[1], S&P 500[2] and Nasdaq[3] 100 climbed about 0.5%, 1.4% and 3.2% respectively this past week as global market sentiment remained mostly rosy. In Europe, the Euro[4] Stoxx[5] 50 and FTSE 100[6] climbed 1.47% and 0.46% respectively. The mood was fairly lackluster in Asia. Japan’s Nikkei 225[7] climbed 0.30% while Australia’s ASX 200[8] fell 1.24%.
As sentiment remained rosy, the anti-risk US Dollar[9] struggled against the growth-linked Australian and New Zealand Dollars. Still, a push at the end of last week left it higher against the Euro, British Pound[10] and Japanese Yen[11]. Surging front-end government bond yields and some USD[12] strength weakened precious metals such as gold[13] and silver[14] into the end of the week.
Corporate earnings were mostly positive, with some hiccups in the tech sector as Amazon and Apple data missed expectations[15]. US third-quarter GDP slowed[16] as the Fed’s preferred gauge of inflation remained well above target. Meanwhile, reluctance from ECB President Christine Lagarde to push back against market rate hike bets temporarily boosted the Euro[17].
All eyes turn to the Federal Reserve next week, where quantitative easing tapering is expected. The markets are pricing in two rate hikes by the end of 2022[18], up significantly since the September rate decision. This also follows some shift in tone from policymakers on inflation. Fed Chair Jerome Powell recently noted upside risks to inflation ahead.
US non-farm payrolls are also expected to cross the wires on Friday, keep a close eye
