The U.S. dollar index shocked higher this week and then fell back, is expected to end the two-week winning streak. The Middle East situation cooled down to weaken safe-haven buying, oil prices plunged to depress the inflation premium, but the U.S. PCE rose to 3.8% year-on-year in April, the core PCE of 3.3%, is expected to limit the dollar’s decline.
Spot gold fell and then repaired this week, once down to a two-month low near $4,365, then bounced back above $4,599, but still fearing a third consecutive weekly decline. Oil prices retreated to ease inflationary pressures, but high interest rates are expected to weigh on non-interest-bearing assets, and safe-haven demand cooled with expectations of a U.S.-Iranian ceasefire.
International crude oil fell sharply this week, WTI once fell below 90 dollars per barrel. Expectations that the U.S.-Iraqi ceasefire extension and Hormuz shipping restrictions may be lifted, triggering a rapid clearing of geopolitical premiums. Subsequent attention needs to be paid to the confirmation of the agreement, the resumption of shipping and the pace of supply repair.
Non-U.S. currencies this week overall by the U.S. dollar retreat boost, the euro, the pound is basically stable; the yen is still under pressure, the dollar against the yen close to the 160 mark, triggering Japan to intervene in the alert; the Australian dollar by the improvement in risk appetite support. The main line is the risk aversion dollar cooling and spread constraints coexist, the follow-up attention to the Japanese policy signals and the Fed’s expectations.
U.S. stocks continued risk appetite this week, with the S&P 500, Nasdaq, and Dow refreshing their closing highs. ai and chips are still the main line, but part of the funds rotated to healthcare and consumption; falling oil prices favor inflation expectations, and energy stocks are under pressure. Dell surged about 39% after hours on AI server demand and earnings guidance hikes, reinforcing AI capex trading.