EURUSD
Euro as German inflation data exceeded expectations, easing concerns over the banking sector.
Germany’s DAX index was flat, while France’s CAC 40 and UK’s FTSE 100 rose marginally.
Chinese service sector activity grew, but manufacturing activity slowed, signalling an uneven recovery in Asia’s largest economy.
The UK economy grew a revised 0.1% in the final quarter of last year, while German retail sales fell 1.3% in February.
Eurozone inflation data is expected to show annual CPI growth of 7.1% in March, with a possible upside based on stronger-than-expected German data.
Markets have already priced in another 50 basis points in hikes from the European Central Bank this year, and a high inflation number will cement this expectation.”
Closing statement: The European markets saw some positive movement, with the German inflation data and receding banking sector concerns weakening the US dollar against the Euro. However, there were mixed results from economic indicators in China and Germany, and the spotlight is on Eurozone inflation data, with markets already pricing in another 50 basis points in hikes from the European Central Bank.
GBPUSD
GBP/USD rose by 0.1% to 1.2392 as the UK economy grew by 0.1% in the fourth quarter of 2022, avoiding a recession.
FTSE 100 and European stocks mostly rose on Friday, with the FTSE 100 increasing by 0.80% to 7,624 points at the open, the CAC 40 climbing by 0.10% to 7,270 points, and the DAX remaining flat at 15,518 points.
S&P 500 futures, Dow futures, and Nasdaq futures were all flat at the start of European trade, following a higher closing on Thursday as the Dow Jones rose by 0.43% to close at 32,859 points, the S&P 500 climbed by 0.57% to finish at 4,050 points, and the tech-heavy NASDAQ gained 0.73% to 12,013.
Closing statement: Overall, markets in Europe and the US saw gains on Friday, largely driven by positive economic data, particularly the news that the UK economy had grown in the fourth quarter of 2022, avoiding a recession. S&P 500, Dow, and Nasdaq futures were flat at the start of European trade, following a higher close on Thursday.
CRUDE OIL
Oil prices were trading lower early on Friday as traders awaited the U.S. inflation release and absorbed the mixed activity data out of China, the world's largest crude importer.
Optimism about China's economic recovery and its associated boost to crude demand has been a key determinant of oil prices this year. Additionally, the extent of the Federal Reserve's hiking cycle and its impact on the U.S. economy, the world's largest consumer of energy, have also played a role in oil prices.
The Iraqi government and Kurdish officials have yet to agree on the resumption of oil exports from Ceyhan, with Iraq insisting that Turkey should not allow Kurdish oil to be exported from the Turkish port without its approval.
The rising crude demand in India is bullish for oil prices. The Indian oil ministry reported last Wednesday that crude oil imports rose in February.
Closing statement: The mixed data from China, ongoing disputes between Iraqi and Kurdish officials, and rising crude demand in India continue to impact oil prices in the global market.
GOLD
The dollar index (DXY) fell by -0.48% on Thursday due to an unexpected downward revision to U.S. Q4 GDP.
Fed comments on Thursday were mostly hawkish, which has a bearish effect on gold prices. Minneapolis Fed President Kashkari stated that the services part of the economy has not slowed down, while Boston Fed President Collins said that inflation remains too high and needs to be brought down to the 2% target.
Thursday's economic news that showed an easing of consumer prices in Germany and Spain curbed demand for gold as an inflation hedge and was bearish for gold prices.
On the dovish side, Richmond Fed President Barkin said he remains undecided on how Fed officials should adjust interest rates at the May FOMC meeting, citing uncertainty in both inflation and consumer demand, as well as additional fallout from the banking crisis.
Closing statement: The mixed sentiment from Fed officials and economic news from Germany and Spain have curbed demand for gold, causing bearish movements in XAU/USD. However, the uncertainty surrounding inflation and consumer demand remains, and some officials are still undecided on how to adjust interest rates in the near future.
NASDAQ
Nasdaq 100 is heading for its second-best quarter in a decade, thanks to the Federal Reserve's recent support and the outperformance of global tech stocks.
On Thursday, Nasdaq closed above the 38.2% Fibonacci level, and it is now headed towards the next resistance point around the 13130 zone.
Tech stocks are outperforming banking shares since early March, after mostly moving together last year.
The next major hurdle to watch will be the Q1 earnings season in April, with major US banks expected to report results in the middle of the month, followed by big techs like Netflix and Tesla by the end of the month.
Closing statement: Nasdaq 100 is poised to end the quarter on a high note, boosted by the Fed's stimulus and strong performance in the tech sector. Investors will now look forward to the upcoming earnings season to see if the positive trend continues for the big players in the industry.