We are starting the European session in a rather cautious mood following a volatile Thursday that disrupted the earlier risk-on sentiment. The major story yesterday was a sharp reversal in equities, especially in the U.S., where indices dropped significantly despite upbeat economic data. The better-than-expected U.S. GDP reading (+0.3% vs. -0.3% expected) was overshadowed by rising concerns around interest rates and profit-taking following NVIDIA’s strong earnings rally.
On Friday morning, equity futures are under pressure again. European indices are opening lower, and sentiment remains fragile. Traders are clearly reassessing their risk exposure heading into the weekend.
Currencies
On the FX front, the U.S. dollar remains firm and is one of the strongest currencies of the week. The Japanese yen continues to struggle after a volatile week, and the Australian dollar remains under pressure despite midweek CPI data that hinted at sticky inflation. The euro is relatively stable this morning, supported by upcoming German and Spanish inflation data.
Commodities
Gold is extending Thursday’s losses, trading lower again this morning. The breakdown from recent support levels, combined with a stronger dollar, is adding to the pressure on precious metals. Silver and platinum are also in the red.
Oil, which took a significant hit on Thursday, remains heavy. Price is moving sideways but still biased to the downside, with no clear bullish catalyst in sight.
Macro Calendar
This morning, we already received Tokyo Core CPI, which came in hotter than expected at 3.6% vs. 3.5%. Ahead, we’re watching for:
-
German and Spanish inflation figures, which could impact the euro.
-
Canada GDP, expected at 0.1%.
-
U.S. Core PCE Price Index (Fed’s preferred inflation gauge), also expected at 0.1%.