Markets rocked last week as fears of a juniper delta variant erupted. Initially, this led to a significant deterioration in risk appetite, which led to a sharp fall in equities. The Dow Jones, Nasdaqand S&P 500 were lower at -1.5-2.7%, but when the mood recovered in the midst of the prevailing “buy-dip” mentality, they were major stock indices the week ended again at a record high.
Bonds behaved in a similar way to growth problems, with treasury yields falling sharply, which was reversed as trading progressed. In the same way crude oil prices fell as much as -8.7% last week just to erase these losses and reach a 0.7% higher balance. See short-term volatility wave led by a huge leap in the VIX index and the OVX index to reach the nine-week and 13-month highs, respectively. The VIX index and the OVX index closed at a lower level during the week as market anxiety eased.
Although the MOVE index, which is 30 days indirect volatility the week of government bond options ended the week at its highest level since March. If bond market volatility is expected to remain high, there is potential for other asset classes, such as equities, commodities and currencies, to continue to grow violently in addition to yields. This seems quite reasonable – especially given the large number of high-risk events and planned data transfers in the EU. economic calendar for the coming week.
MAIN CURRENCIES and gold performance against the US dollar
Federal Reserve Meeting on deck appears to be arguably the catalyst for maximum volatility due to its often marketable potential. Although the Fed’s announcement on Wednesday, July 28 at 18:00 GMT will leave monetary policy unchanged, there is an increasing risk that the central bank will change the language of its press release. As such, traders are likely to follow instructions closely FOMCan important goal for further development and possible future adjustments to the purchase rate of assets.
It leads to US dollar price setting in focus as a barometer for assessing the relative hawkishi or dovishi of the market, as read by the Fed. The strength of the US dollar major currency pairs next week may indicate that the Fed is taking inflation and narrowing talks seriously. On the other hand, a weaker post-Fed position on the US dollar may indicate that the central bank will stick to its temporary inflation talk and remain cautiously favorable. The latter scenario is likely to correspond to a positive increase in risk assets and precious metals, such as gold and silver.
Traders will also be monitoring next week’s updated inflation data from the US, the eurozone, Canada and Australia. Economic recovery progress reports across the US and the US EuroThe region will also be provided with additional GDP data for the second quarter, which are scheduled for publication. The euro in addition to the euro DAX 30, CAC 40and STOXX 50, everyone is ready to review this fresh information on how it may affect the ECB’s policies in the light of the latter’s strategic review and the new inflation outlook. Last but certainly not least, US equity investors are bombarded with quarterly results such as income season hits full speed. What is left in the markets for the coming week?
The change in the price of gold is the basis for next week’s volatility with the Fed’s decision on deck. How real returns and the US dollar respond to the recent guidance from Fed officials is key to the gold outlook.
EUR / USD fell on the day of the ECB ‘s last policy announcement last week, and this weakness is expected to continue this week as the flood of higher economic statistics for the euro area becomes apparent.
AUD / USD increased volatility is likely to increase in the coming days as it faces the risks of a number of important events reaching the end of July.
Market uncertainty provides GBP couples break out of their range.
Although the medium-term outlook remains negative, Bitcoin may move strongly in the coming days if prices are able to keep $ 29,150 / $ 2,600 in basic support.
U.S. indices have a full week ahead, earning revenue from major technology names, U.S. GDP data and the FOMC rate decision. When there is so much in the dock, the potential for volatility increases.
The US dollar index traded higher last week, maintaining its broader upward trend. Conflicting technical signals require caution, but the inclination of the direction remains inclined upwards.
The Nasdaq 100 index aims to overcome the main obstacle of 14,950 for the second time. A successful test may open the door to further benefit, although the MACD indicator indicates signs of weakness.
Gold has not been very active in recent sessions, but it may change next week and provide a stronger trading ground.