This past week was marked by notable movements in various financial markets. Crude oil prices experienced a significant rise due to projected demand increases. Gold rebounded after a recent decline, driven by softer-than-expected inflation data. Meanwhile, the cryptocurrency market saw significant developments with Ethereum’s open interest soaring following ETF approvals. As we look ahead, key economic indicators and central bank meetings will shape the financial landscape in the coming week.
Table of Contents
Economic Events
In the United States, key economic indicators such as retail sales, manufacturing and services PMI, industrial production, housing starts, building permits, and existing home sales were closely monitored. Additionally, speeches by several Federal Reserve officials garnered significant attention. Globally, central bank decisions in Australia, Brazil, China, Norway, Switzerland, and the United Kingdom were of paramount interest. Manufacturing and Services PMI data were published for Australia, Japan, India, France, Germany, the Euro Area, and the United Kingdom. In the UK, critical data releases included the inflation rate, consumer confidence, and retail sales figures. Germany’s ZEW economic sentiment index also received focus. China released a slew of important economic data, including industrial production, retail sales, house prices, the unemployment rate, and fixed asset investment. In Japan, the trade balance and inflation rate were closely monitored.
US10Y
The yield on the US 10-year Treasury note declined for a fourth consecutive session to 4.21% on Friday, reaching its lowest level since the end of March. Lower-than-expected inflation data and a rise in initial claims increased expectations for multiple rate cuts this year. Although the Federal Reserve maintained a hawkish stance, traders are predicting a high likelihood of rate cuts in the coming months. The odds of a rate cut in September have significantly increased, reflecting market sentiment for easing monetary policy.
S&P 500
The S&P 500 ended its streak of four consecutive record closes on Friday, finishing slightly lower. The Dow Jones fell 57 points, while the Nasdaq added 0.1%, extending its closing record streak to five days. Market sentiment was dampened by the Michigan consumer sentiment index dropping to a seven-month low and rising inflation expectations for the five-year period. Most sectors were in the red, with tech and communication services seeing slight gains. Luxury retailer RH’s stock plummeted after reporting a larger-than-expected first-quarter loss, while Adobe surged after raising its full-year guidance. For the week, the S&P 500 rose 1.8%, the Nasdaq gained 3.6%, and the Dow Jones fell 0.6%.
Foreign Exchange Market (FOREX)
EURUSD
The Euro fell 0.1% to $1.072 on Friday, extending its weekly loss amid political uncertainty in France. The British pound remained above $1.28, benefiting from a weaker dollar due to slower-than-expected US inflation. In the UK, the Bank of England is expected to keep rates unchanged next week, with a potential rate cut anticipated in the coming months.
Commodity
GOLD
Gold prices rose above $2,310 per ounce on Friday, recovering from a 1% drop in the previous session. This gain marked the first weekly increase in four weeks as investors assessed softer-than-anticipated US inflation figures against the Federal Reserve’s updated interest rate projections. Data released showed the US Producer Price Index (PPI) unexpectedly fell in May amid lower energy costs, indicating easing inflationary pressures. This followed cooler-than-expected consumer inflation data. Despite the Federal Reserve’s latest projections showing a limited expectation for rate cuts this year, gold found support due to its safe-haven appeal amid economic uncertainty.
Silver
Silver prices fell to $29 per ounce, hitting a one-month low. Despite weaker inflation data, the Federal Reserve’s hawkish projections pressured bullion prices. However, dovish actions from other major central banks and strong demand in the Chinese market limited further declines. US tariffs on Chinese imports of solar cells impacted a key industry for silver, but strong demand from the world’s largest solar farm in Xinjiang prevented a deeper fall in prices.
WTI
WTI crude futures slightly dipped by 0.2% to settle at $78.45 per barrel on Friday, reacting to a decline in US consumer sentiment. However, oil prices ended the week with a gain of over 3%, marking their highest weekly increase since April. The prospect of increased summer fuel demand outweighed market uncertainties regarding US rate cuts. The US Energy Information Administration (EIA) revised its global oil demand growth forecast for 2024, raising it to 1.1 million barrels per day. Russia’s commitment to meeting its OPEC+ output obligations and rising US crude, gasoline, and distillate stockpiles also influenced market dynamics.
Cryptocurrency Market
ETH's Open Interest and Price Dynamics:
Ethereum’s open interest soared to new heights following the approval of ETH ETFs. As depicted in the first chart, both the open interest in USD and ETH saw significant increases, reflecting heightened market activity and investor interest. This approval has likely driven bullish sentiment, pushing prices higher.
ETH-BTC Crosses 200-Day Moving Average:
The second chart illustrates ETH-BTC’s crossing of the 200-day moving average, signaling rising bullish sentiment. This technical indicator often heralds a positive shift in market trends, suggesting potential strength for Ethereum relative to Bitcoin.
Newly Listed Assets on Centralized Exchanges:
In 2024, meme coins and DeFi tokens dominated the list of newly listed assets on centralized exchanges, as shown in the third chart. The diversity of listed assets highlights the evolving nature of the cryptocurrency market, with significant interest in GameFi, RWA, AI/DePIN, and other innovative sectors.
Performance of Assets Labeled as Securities:
The fourth chart showcases the performance of various assets labeled as securities since the SEC’s lawsuit against Binance and Coinbase. Notably, Solana (SOL) experienced a remarkable 668% return, leading the pack, followed by other cryptocurrencies with varying performance levels. This legal backdrop has created significant market volatility and opportunity.
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