BEAR TERRITORY AHEAD

The dollar’s downward trajectory against major currencies is influenced by rate cut speculations, while key economic data this week will further define global interest rate and equity market trends.

MARKET FOCUS THIS WEEK

The ongoing Israeli-Hamas conflict is heightening investor concerns about rising geopolitical risks in financial markets and if this conflict draws in other countries, especially Iran. As long as the war remains relatively localized, investors are largely keeping an eye on the conflict and a finger on the Sell button.

FED’S ‘HAWKISH’ PAUSE

The Fed’s pause indicates a cautious approach to monetary policy amid economic growth and inflation concerns, keeping investors watchful for any further developments in the coming months.

MARKETS THIS WEEK

Impact of rising interest rates and technical breaches in key indices shows the market remains cautious, balancing concerns over economic growth and monetary policies. The Israel-Hamas conflict has elevated gold, crypto and oil prices. However a clear trend is not visible in either of the three yet. Stocks will start to recover when the market believes that bond yields have peaked.

BEAR TERRITORY AHEAD

The economy may face challenges, with expectations of inflation running above trend for several years. Easy money policies have given way to an involuntary tax through inflation, affecting consumers. For the moment it appears safe to assume that the stock markets have topped out.

BONDS IN TURMOIL

Recent gains in Treasury yields reflect investors’ realization of complexities due to surging inflation, rising crude oil prices and the Israel-Hamas conflict. The looming question is whether yields can climb higher and, if so, at what juncture higher yields might inflict significant damage on the economy.

FED AMBIGUITY TO THE FORE

Overall, the Fed remains hawkish, keeping rates high to control inflation and simultaneously make sure the economy stays strong.

FED REMAINS HAWKISH

Overall the Fed remains hawkish keeping rates high to control inflation and simultaneously make sure the economy stays strong.

POWELL EXPECTED TO MAINTAIN HAWKISH STANCE

Gold, which is a precious metal often used for investing, is facing challenges. Traditionally the Gold prices moved up in times of uncertainty, inflationary pressure or distress. However the scene may not play out that way. Governments are quick to inject liquidity in such times. Therefore, given the current economic situation and gold staying much below $1,950 an ounce, it’s not certain if it will go up to $2,000 again in a hurry.

DOLLAR WILL IMPACT CRUDE PRICES

While the connection between Fed policy, yields, the US dollar, and crude oil prices is apparent, it’s important to recognize the intricate interplay of various economic elements shaping the price of crude oil.