Stock markets fell sharply in the first part of this week as crypto sell-off put heavy pressure on the tech sector. However, bulls managed to halt declines on Wednesday even despite more hawkish FOMC Minutes and launched a recovery move on the global stock markets. The only question is whether the upcoming data will provide enough fuel for the potential rally. Be sure to watch US100, GOLD and NZDUSD this week!
US100
US100 fell sharply this week as massive selling returned to the tech sector amid a plunge in cryptocurrencies. Crypto-exposed stocks dragged down Nasdaq as Bitcoin and other digital assets recorded two digit losses. Although US100 managed to erase most of the losses in the second part of the week, the sentiment on the cryptocurrency market is negative, and therefore further declines are not out of the question.
GOLD
Gold was one of the top performers this week as many crypto traders abandoned digital assets in favor of precious metals as they learnt the hard way how volatile the crypto market can be at times. If the declines in the cryptocurrency market continue to deepen, then gold may strengthen further. Also, the main event of the week, i.e. the US PCE inflation reading, which will be released on Friday together with Michigan's (final) inflation expectations, may trigger higher volatility in US yields. This, in turn, could potentially affect gold prices.
NZDUSD
RBNZ will hold a policy meeting next week and no major policy changes are expected. Still, investors will try to assess whether policymakers are willing to follow the BoC's footsteps and take more actions or will they continue to play down inflation concerns. When it comes to the dollar, the above-mentioned US inflation data may have a significant impact on the USD currency pairs.
