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17
Jun

In the Week ahead: U.S Retail Sales, Unemployment Claims, Eurozone and U.S. PMI’s

calendar 17/06/2024 - 08:34 UTC

The U.S. Dollar continued its positive traction on Friday against other major currencies, with the dollar index (USDX) ending the session 0.27% higher. The index hovered around its highest level since early May near 105.85 and then retreated and ended the session near 105.50 but held tis daily gains. The Federal Reserve (Fed) continues to hold its economic activity revisions steady but revised its Personal Consumption Expenditures (PCE) estimates higher. On Friday, Consumer Confidence data from the University of Michigan showed poor results that reached a seven-month low.

According to widely cited CME Fedwatch tool, bets that the Fed will initiate its rate cut cycle in September remained to 59.5% while odds for a November rate cut currently rose at 49.3%.

In other news Euro registered weekly losses with the European region mired in political turmoil after far-right parties made gains in European Parliament elections, which concluded on Sunday. French President Emmanuel Macron responded to losses to the right-wing National Front party, led by Marie Le Pen, by calling for a snap election in France.

In the energy front, Oil prices settled slightly lower on Friday after a survey showed deteriorating U.S. consumer sentiment, but prices rose more than 4% for the week as investors weighed forecasts for solid demand for crude oil and fuel in 2024. WTI Oil ended the week with gains of 4.20% while Brent Oil added 4.02% weekly gains.

US Tech 100 closed at record high on Friday, led by tech and expectations for Federal Reserve rate cuts later this year, though a dent in consumer sentiment kept gains in check. Adobe Systems stock soared 14% after the software giant logged strong earnings and hiked its 2024 guidance on higher demand for its AI-powered editing tools.

Going forward, investors will pay close attention to the United States (US) monthly Retail Sales data for May, which will be published on Tuesday.

EUR/USD

The EUR/USD pair slipped further on Friday ending the session 0.27% lower. Political pressure is weighing down the Euro after a wide shift in European voter sentiment tilted towards right-of-centre political parties in European parliamentary elections recently, sparking a snap election in France.

On the US side, steepening negative data is reigniting possible concerns of an economic downturn, fuelled by a worse-than-expected print in the University of Michigan’s (UoM) Consumer Sentiment Survey Index.

EUR/USD

Gold

Gold prices rose over 1% on Friday and set their first weekly gain in four, as signs of slowing inflation in the U.S. raised hopes of a rate cut later this year and a stock selloff across Europe also lent support.

Data this week showed consumer prices were unchanged in May for the first time in nearly two years, while producer prices unexpectedly fell.

However, the U.S. Federal Reserve's median "dot plot" released after its two-day policy meeting - where it kept interest rates steady - showed the policymakers projecting just one quarter-point cut.

Gold

WTI Oil

Oil prices rose on Friday adding to last week's rebound after the Organization of Petroleum Exporting Countries and allies (OPEC+) reiterated its commitment to keeping production low to support prices.

Brent and the WTI benchmark gained nearly 4% over the week, highest weekly rise in percentage terms since April.

Softer U.S. Inflation data seen this week, spurring hopes for sooner rates cuts, also helped lift sentiment on oil, with many now pricing in two rate cuts for the year.

WTI Oil

US 500

U.S. stocks were mixed after the close on Friday, as gains in the Technology, Telecoms and Healthcare sectors led shares higher while losses in the Industrials, Oil & Gas and Basic Materials sectors led shares lower.

At the close in NYSE, the US 30 declined 0.10%, while the US 500 ended the session unchanged, and the US Tech 100 climbed 0.36%.

The University of Michigan's preliminary consumer sentiment index declined to a reading of 65.6 in June, the from 69.1 a month earlier, while one-year and five-year inflation expectations eased to 2.9% and 2.8% from 3.1% and 2.9%, in the prior month, respectively.

US 500

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.

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