European stocks lost some ground on Friday to end what has otherwise been a positive week for stocks after Fed Chair Powell stated that policymakers were not confident interest rates are high enough to cool inflation. If investors were looking for a reason to lock in some profits after a week and half of strong stock gains across European and US stock markets, Powell handed it to them on a silver plate. I don't believe what Powell said was a shock but I do feel the general consensus amongst investors is that interest rates are at or close to their peaks and their focus is turning to the timing of rate cuts. The fact the Fed has sent a clear signal that the conversation for rate cuts is far too premature, this has given some investors a bit of a reality check today with the FTSE losing more than 1% with European indices such as the DAX following a similar pattern.
Crypto recovery continues as Ethereum price takes flight
We’re seeing a continuation of the positive price sentiment seen in Cryptocurrencies over the past week. After news broke that Blackrock had registered its iShares Ethereum Trust corporate entity in Delaware and then proceeded to file a 19b-4 form with Nasdaq for its much speculated Ethereum ETF, this has gotten ETH buyers very excited today. The result in the markets has been clear, with Ethereum enjoying strong buying momentum helping to lift prices by more than 9% on the day to trade at its highest levels for 19 months above $2000. With Bitcoin also trading around $37,000 - despite some minor falls in the past few hours - the famous 'crypto buzz' certainly feels to be returning.
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EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
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