Indices: The major US indices registered their strongest week so far this year and injected investors with optimism. The combined effect of better-than-expected earnings reports and a growing confidence in the economy gave a boost to US indices. The S&P500 rose by 2.35% reaching 1,839, the Dow added 2.28% to its value to close at 16,150 points on Friday, while the technological Nasdaq100 increased by 2.86% to end the week at 3,663 points.
Positive sentiment settled over Europe, too. Despite the political turmoil in Italy, ratings agency Moody’s did not think twice about raising the country’s credit rating from negative to stable. That in turn played a positive role in lifting the local S&P/MIB by 3.85% to reach 20,435. The other major European indices also traded on the green: Germany’s DAX30 climbed by 3.43%, France’s CAC40 added 2.16% to its value, Spain’s IBEX was up by 0.37%, and the UK’s FTSE100 had a weekly increase of 1.13% to 6,672.
Last week’s most interesting trading included the British pound. Increasing indications for gradual interest rate increases by the Bank of England caused buyers to be more active and the GBP/USD climbed by 330 pips in the last five days.
The EUR/USD also appreciated but far more modestly, by only 59 pips. The week ended positively for the AUD/USD as well, which rose by 76 pips on a weekly basis.
We saw interesting chart movements in metals as well. Both Gold and silver are giving more and more indications that they are entering in a bull market, as both metals reported serious increases. Gold ended the week at $1,318 per troy ounce, or an increase to just below 4%, while silver closed on Friday at $ 21.42 per troy ounce, or a nearly 7% increase.
Last week saw another interesting event which deserved a close following. Initial harsh statements by central banks and governments and the subsequent hacking attempt collapsed the price of emerging virtual currency bitcoin by nearly 50%. Currently, the value of the new virtual means of payment gravitates around $250. A week earlier the price was just over $500 while at the end of last year quotes were priced over $1,200 for a bitcoin.
What to expect this week?
Monday had a very early start this week, already having revealed its portion of events amid closed US banks due to Presidents’ Day and low data volume from European and Asian–Pacific markets.
Tuesday’s highlights will include the Reserve Bank of Australia meeting minutes, the Bank of Japan Interest Rate Decision, the UK’s Consumer Price Index for January (MoM and YoY), the ZEW survey on both the Eurozone, and Germany’s Economic Sentiment for February. Wednesday’s top of the day will be the Bank of Japan Monthly Economic Survey, the Bank of England Minutes, along with the UK’s Claimant Count Change, the US Building Permits and Housing Starts. Thursday will reveal the Preliminary Release of the Markit Manufacturing PMI of Germany, France and the Eurozone, US Consumer Price Index for January and the country’s Initial Jobless Claims. Friday will close the week with the UK’s Retail Sales for January (YoY and MoM) and the US Existing Home Sales for January.
Further reading: Pound dominates this week, and probably the nextGet the 5 most predictable currency pairs