Markets Week Ahead: Dow Jones, Nasdaq 100, US Dollar, AUD/USD, US CPI

Global market sentiment generally deteriorated this past week. On Wall Street, the Dow Jones and Nasdaq 100 weakened 0.17% and 2.41%, respectively. Things were not much better across the Atlantic, where the FTSE 100 and DAX 40 fell 0.24% and 1.09%, respectively. Meanwhile, in the Asia-Pacific region, the Hang Seng Index and ASX 200 declined by 2.17% and 1.65%, respectively.

Broadly speaking, markets have been aligning themselves more closely with what the Federal Reserve is anticipating for interest rates this year. That is, traders have almost priced out rate cuts by the end of this year following Januarys blowout non-farm payrolls report. We also had relatively hawkish Fedspeak this past week.

Still, it was a mixed bag for the US Dollar. It outperformed the Euro, Japanese Yen and Canadian Dollar. Meanwhile, the British Pound and Australian Dollar fared better. Sterling performed solidly after data earlier this past week showed that the UK economy just narrowly avoided a recession in 2022.

In the week ahead, all eyes turn to the next US inflation report. CPI is seen clocking in at 6.2%, which would represent a further slowdown from 6.5%. With markets incredibly sensitive to US monetary policy, a slight miss/beat would be a key ingredient for volatility. UK CPI data is also due. Keep a close eye on Australian employment data as well for AUD/USD. What else is in store for markets in the week ahead？

How Markets Performed – Week of 2/6

Fundamental Forecasts:

S&P 500, NDX Weekly Price Forecast: Higher Yields Weigh on Stocks Ahead of US CPI

The S&P 500 index and NASDAQ 100 head into the week on the backfoot with singular focus on the U.S. CPI report.

Euro Week Ahead: EUR/USD Downside in Focus With US CPI Ahead

The Euro suffered its worst 2-week drop since September as markets aligned themselves closer with what the Fed sees for tightening this year. EUR/USD faces US CPI next.

British Pound (GBP) Fundamental Outlook for the Week Ahead

UK growth flatlined in Q4 2022 according to the Office for National Statistics (ONS) today, leaving Sterling caught in the growth vs. inflation conundrum.

Australian Dollar Outlook: The Good Times Keep Rolling

The Australian Dollar steadied during the week despite the RBA hiking rates and the trade surplus continuing to fill the coffers of exporters and the government. Will AUD/USD go higher？

US Dollar Forecast: Inflation Data to Set Tone for Bond Yields, Fed Path

The U.S. dollar could extend its recovery in the coming week if January U.S. inflation data surprises to the upside and prompt traders to reprice higher the path of Fed rate hikes.

Gold Fundamental Forecast: US Yields and USD Guide Gold Ahead of CPI

The U.S. dollar could extend its recovery in the coming week if January U.S. inflation data surprises to the upside and prompt traders to reprice higher the path of Fed rate hikes.

Technical Forecasts:

Gold Price Forecast: XAU/USD Stalks Technical Support Around $1,870.

Gold prices have stalled in a narrow range of technical support and resistance between $1,870 and $1.880. With XAU/USD trading flat, breakout potential builds.

S&P 500, Nasdaq and Dow Jones Technical Forecast for the Week Ahead

The technicals for US Indices hint at further downside ahead following a positive start to 2023. Can US data out this week reignite the bullish momentum？