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Recent macro developments and NFP insights
The financial markets have been highly volatile and trend-driven lately, offering substantial
returns for trend-following strategies. With a load of factors influencing market
movements—from the recent JPY deleveraging that caused significant disruption to ongoing
recessionary risks and persistent geopolitical tensions, particularly in the oil sector—there’s
much to evaluate.
In this report, we will delve into the current macroeconomic landscape, trends in equity
markets, and the behavior of the yield curve.
Macroeconomic Outlook:
Next week, the focus will be on the upcoming jobs data, which is set to play a critical role in
shaping the trajectory of key assets, including the USD, Nasdaq, and Gold. The importance
of this data cannot be overstated, as it will influence market sentiment and direction.
Should the jobs report reveal weakening numbers, we could see increased capital outflows
from the USD. Conversely, positive employment data may restore confidence in the
currency, potentially boosting both the USD and broader markets. The intensity of rate cuts
anticipated by the market will be a crucial metric to monitor in this context.
Equity Market Trends:
On the equity front, growth stocks continue to perform well. However, from a technical
perspective, the market appears to be in a consolidation phase, particularly when compared
to the last rally. We've identified a key level on the chart, which we refer to as the "do or die
zone." An hourly break and closure above this level could signal the continuation of the
current rally from recent lows. Conversely, if prices remain below this level, we may see
downside momentum intensify. This area will be pivotal in the coming week.
Gold Analysis:
Turning to gold, we’ve previously highlighted that any price above $2,500 is considered
overextended. Currently, gold prices remain significantly deviated. Our maximum deviation
level for the yellow metal is set at $2,700—an extreme level that we do not expect to reach unless prices first close above the previous all-time high. Our preferred target range is
around $2,580 to $2,600, but we emphasize that downside potential is more likely unless a
breakout above prior highs occurs
Yield Curve Dynamics:
The yield curve, after a prolonged period of inversion, is on the cusp of normalizing. The key
to understanding future movements lies in observing the performance of both the short and
long ends of the curve.
To stay updated on how to capitalize on these developments, we invite you to join our Free
Channels—links are available on our homepage.
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