Global market sentiment was a mixed bag this past week. Strong gains were seen on Wall Street[1] as the Nasdaq[2] 100 and Dow Jones gained about 2.3% and 0.33% respectively. Equities in Europe were mixed, with the FTSE 100[3] rallying 1% as the DAX 40[4] declined 0.74%. In Asia, the Nikkei 225[5] roared 5.6% higher as the Hang Seng was relatively flat.
In somewhat of a surprise, sentiment improved despite a more hawkish Federal Reserve. Chair Jerome Powell opened the door to a 50-basis point hike at meetings if needed. He also downplayed concerns about a recession in 2023. The US Dollar[6] was mixed, outperforming the Euro[7] and British Pound[8]. The sentiment-linked Australian and New Zealand Dollars outperformed.
It was a dismal week for the anti-risk Japanese Yen[9]. Rising Treasury yields continue to erode JPY’s attractiveness in a world where the Bank of Japan remains dovish compared to its major peers. Commodity prices roared higher. WTI crude oil[10] gained 7.7% as gold[11] climbed 1.7%. Other metals, like aluminum and iron ore, gained 7% and 4.7% respectively.
Economic event risk returns in the week ahead, with the US docket busy. Top-tier event risks from that part of the world includes the Fed’s preferred inflation gauge and non-farm payrolls. Traders will be closely eyeing how price pressures continue to work their way into the economy, opening the door to a more hawkish central bank.
Outside of the world’s largest economy, China will release March manufacturing PMI. Concerns have been rising of a slowing China, which could have key consequences for global growth. Euro-area inflation data will also cross the
