Stocks as well as other types of risk assets took a hit this week. Situation improved slightly by the end of the week as the ECB persuaded investors that it is not tapering yet. While there are no decisions from major central banks scheduled for the upcoming week, top-tier economic reports from the United States will be released. Be sure to watch DE30, GOLD and US100 next week.
Global equities pulled back this week amid concerns that major central banks will begin tapering asset purchases. While ECB slowed pace of its emergency purchases, President Lagarde assured markets that it is not tapering but a recalibration. Investor seem to have believe in this explanation as indices began to recover. However, is reasoning behind this recovery solid enough to push DE30 to fresh all-time highs?
Gold prices took a strong hit at the beginning of this week along with equity markets. However, unlike stocks, the precious metal failed to recover in the later part of the week. Price has been stuck near the $1,800 mark and struggled to produce a bigger move in either direction. US CPI data for August will be released next Tuesday at 1:30 pm BST. Will data finally show a slowdown that the Fed is so much looking for? Or is another acceleration coming that gold price would not see as welcome?
US tech index Nasdaq-100 (US100) has proved to be somewhat more resilient during this week's sell-off than other indices from Wall Street. In spite of sky-high valuations, tech stocks continue to perform well and ignore deteriorating data. Next week investors will be offered retail sales data for August from the United States with median estimates pointing to a slight drop on a month-over month basis. However, as federal unemployment benefits start to expire there is a risk of a bigger hit.