The S&P500 rose for the third consecutive week, closing at 1,999.99 ( 2.68% weekly), the longest rally since October. The DJIA closed above the psychological level of 17,000 at 17,006.77 points ( 2.27% weekly). Traders and portfolio managers disagree regarding the robustness of the rally: the bearish think that was just a bear market rally and thus are expecting another catalyst, like negative macro news from China or disappointing statistics from the Federal Reserve, to see another selloff that will bring both stock indices and commodities to test new lows. The bullish are confident that Chinese officials will do whatever it takes to avoid a hard landing to keep its growth above 6.5% annually. They also estimate not only that the FED won`t rise rates this month, but also that this year rates won`t rise more than 75bp. This battle between bulls and bears could be without a winner this year if Indices and Commodities trade in a range where short term opportunities could be more successful than medium term global macro trades. Crude Oil closed at 37.37 $/barrel ( 10.83%) and was the second best performer in the commodity group this week. Technical factors, like the breakout of the 2 month trading range, and fundamental buyers as well lifted Crude Oil. The energy and precious metal groups were the best performers of the week. Silver closed at 15.5 $/oz ( 5.65% weekly) and Gold at 1,259.64 $/oz ( 3.25% weekly).
In the currency market the US dollar was the loser of the week in the major group of currencies . EurUsd is trendless in the medium term, and the flat 200SMA is giving poor results to trend following strategies. The rate closed at 1.1004 ( 0.70% weekly) up 77 pips. UsdJpy at 113.73 (-0.17% weekly) is off its 2016 low but may lose its momentum if risk appetite in the region should decrease. GbpUsd at 1.4224 ( 2.57% weekly) gained 356 pips and rebounded after the rate reached a level traded back on January 2009. The rate was down for 4 consecutive months because the Bank of England admitted to the deflationary environment of The UK. The recent consequences of Brexit kept the British Pound under pressure. UsdCad slid for the seventh consecutive week after it reached a multiyear high at 1.4680. The pair lost 201 pips at 1.3317 (-1.49% weekly). UsdChf lost parity and closed at 0.9928 (-0.35% weekly). The US dollar showed its weakness against Oceanic currencies as well: NzdUsd at 0.6806 (2.81% weekly) gained 186 pips and AudUsd rose 307 pips to 0.7741 (4.31% weekly). On Monday the most relevant event of the Asian session will be the speech of BoJ Governor Kuroda at 03:40 GMT. On Tuesday Chinese Trade Balance data at 02:00 GMT could decide the direction of risky assets. The European session will kick off with the Swiss Unemployment Rate at 06:45 GMT followed by the Eurozone GDP data at 10:00 GMT. The UK NIESR GDP data will be released on Wednesday at 15:00 GMT; at the same time the Bank of Canada will decide the interest rate level thus that time window should be quite volatile, especially for GbpCad. At 20:00 GMT the Reserve Bank of New Zealand will decide its Interest Rate and will also hold a Press Conference. On Thursday Chinese CPI data at 01:30 GMT and then during the European session it will be the turn of the ECB Interest Rate decision at 12:45 GMT followed by Monetary Policy Statement and Press Conference at 13:30 GMT. At 21:15 Bank of Canada Poloz will hold a speech. On Friday UK Consumer Inflation Expectations at 09:30 GMT and then the last event of the day will be the Baker Hughes US Oil Rig Count at 18:00 GMT.