Gold rebounds amid turnaround week, yields, cryptos drift lower

Dicey markets are in fashion during early Friday as traders struggle for fresh clues amid a light calendar. Even so, the weekly moves part ways from the previous trends, helping gold and Antipodeans while trimming the USD gains.

PBOC rate cut, China’s covid improvement and softer USD allowed market players to consolidate recent moves. On the other hand, IMF comments and Japan inflation put a floor under the US dollar downside during a sluggish session. Yields were mostly jittery during the second weekly fall, which in turn dragged the greenback and allow gold to snap a five-week downtrend.

Cryptocurrencies failed to bank on sluggish USD as fears of more regulations battle hopes of more funding.

Following is the list of major assets’ latest performances:

• Brent oil keeps rebound from weekly low with mild gains around $111.60.
• Gold renews one-week high around $1,850.
• USD Index struggles to overcome fortnight low, up 0.10% near 103.00.
• FTSE 100 rises 1.30% but DAX and EUROSTOXX50 both gain near 1.5% each daily.
• Dow Jones dropped 0.75% while S&P 500 and Nasdaq plummeted 0.58% and 0.26% on Thursday.
• BTCUSD and ETHUSD both remain lackluster around $30,000 and $2,000 respectively.

Contrasting signals trouble traders

Global markets remain mostly haywire as investors recheck previous fundamentals and add some confirmatory catalysts amid an active session. The US dollar remains on the back foot as softer data joins repeated Fedspeak but the softer yields and PBOC’s rate-cut join covid hopes in China to underpin cautious optimism, which in turn helps gold to pick up bids.

Crude oil prices remain sluggish as traders await more geopolitical headlines before cheering softer USD, despite eyeing the positive week.

AUDUSD and NZDUSD also recovered on weekly basis, bracing for the strongest five-day gains since March. USDCHF, on the other hand, braces for the biggest weekly loss in 26 months, not to forget pausing the six-week uptrend. Further, GBPUSD also cheers upbeat Retail Sales with weekly gains and so does the EURUSD as ECBSpeak sounds more hawkish than the already-known Fed statements.

BTCUSD and ETHUSD also struggle to benefit from softer USD and cautious optimism as fears of more regulations, as conveyed by the G7 communiqué, battle hopes of more funding for DeFi after KuCoin’s efforts. 

⏫ 🟢 Strong buy: AUDUSD, NZDUSD

⏬ 🔴 Strong sell: Nasdaq, silver

⬆️ 🟢 Buy: USD Index, gold, USDJPY

⬇️ 🔴 Sell: DAX, FTSE 100, brent oil, gold, ETHUSD, BTCUSD

Nothing major!

Given the light calendar, except for Eurozone Consumer Confidence, coupled with the mixed outlook, global markets are likely to carry the latest moves without any major surprises. 

The same highlights the risk assets for the next week as PMIs, RBNZ and multiple central bankers are scheduled for speeches.

It’s worth noting, however, that the risk catalyst can entertain momentum traders during a likely sluggish end to the turnaround week.

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