Market sentiment struggled this past week, with most benchmark stock indices ending in the red. On Wall Street, the Dow Jones and tech-heavy Nasdaq Composite closed -0.53% and -0.32% respectively. In the Asia-Pacific region, the Nikkei 225 and Hang Seng declined 1.29% and 1.22% respectively. An exception was in the UK, where the FTSE 100 rose almost 0.5%.
This meant a rosy week for the anti-risk US Dollar, but most of its progress occurred on Friday following persistent losses throughout the week. A dovish Federal Reserve meant that December 2022 rate hike bets were mostly unchanged. Gains in the USD may have been a sign of month-end rebalancing. Treasury prices rose as yields weakened, suggesting some degree of risk aversion.
The Canadian Dollar also outperformed in the aftermath of a less-dovish BoC earlier in the month, holding its ground against USD. Strength in the Greenback cooled off recent gains in precious metals, such as gold and silver prices. It remains to be seen if the US Dollar can extend its gain as May begins, but a lot of eyes may be on the British Pound ahead.
The Bank of England is due for its next monetary policy announcement. This is as Scotland holds parliamentary elections. Enough support for the Scottish National Party could bring back expectations of another independence referendum. As such, it could be a volatile week for Sterling. Meanwhile, the Australian Dollar will be eyeing the next RBA rate decision.
As for economic data, the US will release April’s non-farm payrolls report. But, it is unclear to the extent it can