We are closing out an extremely volatile week, but sentiment is currently leaning positive. Thursday brought important macro data and another wave of strong moves across various markets. Most notably, the US GDP disappointed, coming in at –0.5%, which was significantly below expectations. However, this was offset by an exceptionally strong durable goods orders reading, which came in at +16.4%, a huge upside surprise that helped lift the overall sentiment.
Despite the weak GDP print, indices rallied on Thursday. American indices pushed to new highs, especially the Nasdaq, which continues to show relative strength. European indices, although lagging slightly behind, joined the party, with the DAX showing notable momentum in the latter half of the session. This bullish sentiment carries into Friday’s open, where futures are pointing to another strong start.
On the commodities front, the contrast remains stark. Oil, which started the week with a huge bullish gap, continues to struggle. Despite a minor rebound on Thursday, the trend remains deeply bearish—oil is down over 10% this week. Even more dramatic is the situation in natural gas, which is down more than 20% this week, including a 4% drop on Thursday alone.
Gold is also under pressure. The safe haven metal remains negative for the week, as investors continue to favor risk assets. On the other hand, palladium, platinum, and copper are showing more resilience and are positive for the week, suggesting selective strength across the metal space.
Turning to the FX market, the US dollar remains under pressure, especially in light of the growing public tension between Donald Trump and Jerome Powell. Trump’s public criticism of Powell and talk of a potential leadership change at the Fed have added to the dollar’s weakness. The Canadian dollar is also underperforming.
Meanwhile, the Japanese yen, after being weak most of the week, showed signs of recovery on Thursday and is firming further this morning. If the yen continues to strengthen through the day, we may see it recover all its recent losses and turn positive for the week.
In terms of today's economic calendar, we’ve already seen Tokyo Core CPI from Japan, which came in at 3.1%, slightly below expectations. Still ahead are key readings including Canadian GDP and the Core PCE Price Index from the US, which is expected at 0.1%. These releases could add another layer of volatility before the week closes.
Let’s see if the risk-on sentiment continues to dominate into the weekend, or if the upcoming data will trigger another round of repositioning. Stay safe and trade well.