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FOMC, SNB, BOE, CPI, Forex, Indices, Gold, Crypto, & MORE | Eightcap Trade Zone Weekly Market Wrap

Published: 24.03.2023
by Joseph Jeffriess

The Central banks took focus this week, with the Fed, SNB, and BOE all raising rates as expected. The comments made by secretary Yellen definitely overshadowed the Fed’s message. UK inflation was another interesting surprise as it climbed to 10.4%, well over the 9.9% expected.

With the banking crisis in the background, her comments sparked some panic, stopping a two-day rally by the US30. Stocks declined after comments suggested there won’t be any government bailouts. But she later assured the markets that they’re prepared for additional deposit actions if warranted.

The USD fell this week and looks entrenched in a new leg lower. The AUD couldn’t capitalise on the USD, but the EUR and GBP posted a solid week. Gold bounced back from a two-day decline retesting 2000 for a second time during the week. Attention back on how far this rally can go, 2000 looks to be a short-term resistance, so a close above that level could be a good first sign of buyer commitment.

The Nasdaq led the charge this week and continues to look firmer than the Dow. The Dow and US30 started the week well, but this turned after Secretary Yellen’s comments.

Crypto was mixed, but Bitcoin remains the focus. Price added 5.84% to the current weekly high. Has Bitcoin’s role changed? Is it now being seen as digital gold and a hedge under the current situation? Yes, I think it is but has it decoupled from the USD? I don’t think there is evidence of that yet, as the USD has been lower due to the banking issues, which has definitely helped BTC a lot. But what we have seen this week is a clear message that BTC still has plenty of demand, and people are looking to it a lot more over the others as a point of safety.

The PMI services and manufacturing data ends the week, and next week the EU makes its shift to daylight savings on Sunday. Other data to keep an eye on US consumer confidence and PCE price index. Australian CPI could also be interesting as the RBA is facing more pressure to hold rates, but if we see a surprise uptick in CPI could that keep rate rises on the agenda?

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