The Federal Reserve surprised investors this week with its decision that was seen as hawkish. Gold and stocks moved lower while the US dollar strengthened. Investors may be offered an update next week as a number of Fed members are scheduled to speak. Apart from that, flash release of PMI indices for June will also draw markets' attention. Be sure to watch GOLD, DE30 and GBPUSD next week!
GOLD
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appFOMC surprised markets this week with a hawkish tilt. The US dollar rallied in response and gold plunged below the $1,800 mark. Precious metals may remain active next week amid an avalanche of speeches from Fed members. Investors are eager to know whether adjustments to the IOER rate were technical in nature or was it a hint that the Fed began to consider tightening. Monday and Thursday are days with the largest number of speeches scheduled - 3 and 4, respectively. Moreover, Chairman Powell will appear before the House Committee on Tuesday to discuss pandemic programmes.
DE30
German DE30 reached a fresh all-time high in the 15,800 pts area at the beginning of this week. However, the index began to underperform later on, following the FOMC meeting that was seen as a hawkish tilt. European equities may get a chance to recover on Wednesday when a set of flash PMI indices for June will be released. Slightly weaker manufacturing print and improvement in the services sector are expected. French and German readings at 8:15 am BST and 8:30 am BST, respectively, will be most closely watched.
GBPUSD
GBPUSD dropped this week, mostly on the back of USD strengthening. The pair will get a chance to move next week as the Bank of England is set to announce a monetary policy decision (Thursday, 12:00 pm BST). Markets do not see any adjustments to rates or QE programme but there is expectation that, just as it was the case with the FOMC meeting, the number of hawks in BoE may increase. Pound may also experience elevated volatility on Wednesday, when PMIs for June are released (9:30 am BST).
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
