Three markets to watch next week (07.02.2025)

Trade tariffs captured the mood of investors in financial markets in the past week. Although we learned a number of important macroeconomic releases and financial results of key companies, uncertainties about the future of international trade dictated changes in various instruments. The topic of trade tariffs and the future policy of the US president will remain a key aspect for the markets, but in the coming week it is worth paying attention to such issues as the publication of US inflation, Powell's testimony before Congress and the results of companies such as McDonald's, Coca-Cola and Cisco. In view of this, markets such as USDJPY, US500 and GOLD are worth paying attention to. 

USDJPY

The risk of trade tariffs led to an initial strengthening of the dollar, but later the world's most important currency lost value when some tariffs were postponed. It is worth noting that the dollar lost heavily against the yen, as pressure is mounting for further interest rate hikes in Japan. Nevertheless, in the coming week we will learn a number of important macroeconomic readings from the US. These will include CPI inflation on Wednesday and retail sales on Friday. These data will be crucial from the perspective of the Fed, which is putting off further interest rate cuts for the moment. 

US500

U.S. indices have fully recovered from initial concerns over trade tariffs. The U.S. economy had the most to lose in the event of a trade war in the continental United States. Maintaining tariffs with China, however, raises problems for the future prospects of US earnings. It is worth noting what companies such as McDonald's, Coca-Cola and Cisco, which have a presence not only in China, but also globally, will say about the tariffs in their earnings comments. 

Gold

Gold is reaching new historic highs overnight, on the back of fears about the future. Geopolitical risks have been driving gold prices higher for several months now. However, monetary policy also plays an important factor in the further price quotations of bullion. Next Tuesday is the first day of Powell's hearings before the US Congress. More importantly, he will be questioned by the new authorities, so this could be an important event from the perspective of expectations for interest rates. The exclusion of reductions could work negatively on gold, which has not scored a major correction since last December. Nevertheless, assurances that reductions are coming could lead to a continuation of the path to the $3,000 per ounce level.