The S&P 500 broad market index futures saw
a modest increase of 0.3% to reach 5254 points this week, marking yet another
all-time high at 5270 points on Thursday. With markets mostly resting on Good
Friday, attention shifts to key economic data releases.
The first quarter of 2024 closed on a notably
positive note with a 10.15% rise, the best performance since 2019. March also
saw a positive trend with a 3.3% upside, albeit less impressive compared to
March 2023's 3.5% increase.
Despite the holiday period, investors are
closely watching for the release of February Personal Consumption Expenditures
(PCE) data in the U.S., a favored inflation gauge of the Federal Reserve (Fed).
Consensus forecasts suggest a rise of 2.5% year-on-year (YoY) compared to 2.4%
YoY in January, with a monthly increase expected to 0.4% from 0.3% previously.
Core PCE, excluding volatile food and energy prices, is anticipated to remain
steady at 2.8% YoY, but slow down to 0.3% month-on-month (MoM) from 0.4% MoM in
January.
U.S. 10-year Treasuries yields are hovering
around 4.20%, while bets on interest rate cuts by the Fed in June have
decreased to 61.0% from 67.0% earlier in the week. Investor sentiment indicates
a belief in the resilience of the American economy, even in the face of potentially
higher interest rates.
The U.S. Dollar saw a moderate rise of 0.3%
following an upward revision of the U.S. Q4 2023 GDP to 3.4% from 3.2% in the
previous estimate. Oil and gold prices are also on the rise, supported by
expectations of interest rates cut in June.
Looking ahead, the beginning of the next week
may bring volatility as investors assess the impact of the PCE data. The rest
of the Nonfarm Payrolls week would be rather calm, at least before the
publication of the U.S. labour market report for March.
Technically, the S&P 500 index has
surpassed the final upside target zone at 4850-4950 points and entered a period
of potential correction opportunities. Therefore, monitoring any reversal
patterns that may emerge on the chart is advisable. The existing reversal
pattern suggests a standard correction of 5-7%, with potential downside
opportunities possibly emerging soon. The market is craving for correction, but
when it could start remain unclear. The nearest resistance is at 5300 points,
while support is at 5200-5220 points.
In the oil market, prices are trying again to breach
the resistance at $87.00-92.00 per barrel of Brent crude. From a technical
standpoint, downward pressure prevails in the market, expected to continue
throughout mid-May. Therefore, a breakthrough is unlikely. The nearest
resistance is at $87.00-92.00 per barrel, while support is at $81.00-83.00 per
barrel.
Gold prices, having reached mid-term upside
targets at $2000-2100 per troy ounce, established a new all-time high at $2236
following the Fed's clear dovish signals to the market. The nearest resistance
is at $2210-2230 per ounce, while support is at $2110-2130. A technical period
favorable for downside scenarios has commenced, expected to last until mid-April.
The Greenback's strengthening continued this
week with 0.3% upside. The EURUSD edged down to 1.07680, the lowest since February
20. Betting on both the rising and declining EURUSD remains risky, with a
return to the 1.11500-1.12500 area likely, but a drop to 1.05000 should not be
excluded.