Gold Muted, Nasdaq 100, EUR/USD, GBP/USD Rip as US Yields Sink -

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Most Read: US Dollar Forecast – EUR/USD, GBP/USD and AUD/USD Break Out, USD/JPY Flat

U.S. Treasury yields plummeted this past week after Fed Chair Powell failed to redirect investors toward pricing further monetary tightening and U.S. employment data revealed a sharp slowdown in hiring activity. The large retreat in yields sent the broader U.S. dollar reeling, paving the way for a furious rally in major currency pairs such as EUR/USD, GBP/USD and AUD/USD heading into the weekend.

Bond market dynamics also benefited risk assets, boosting both the S&P 500 and Nasdaq 100, which had their best week since November 2022. With sentiment clearly recovering and signs that a recession is not yet imminent, stocks may have room to run higher in the near term, with seasonality possibly providing an additional source of strength.

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Focusing on gold, bullion was subdued, unable to take advantage of the weaker U.S. dollar and falling government rates. This is probably because the geopolitical premium built up in the precious metal following the terrorist attacks in Israel has started to unwind, as the war against Hamas has not escalated into a wider regional conflict in the Middle East.

Looking ahead, there are no major economic reports in the U.S in the coming week., but several Federal Reserve members, including Powell, will speak publicly. Retail traders should closely follow these events and scrutinize official statements for insights into the central bank’s thinking and the likely path of monetary policy.

Any indication that the policymakers will tread carefully and refrain from hiking rates again could weigh on Treasury yields and the U.S. dollar, but support stocks and precious metals. Hawkish commentary could have the opposite effect on these assets. For a deeper dive into the catalysts that could guide markets and create volatility, be sure to check out selected forecasts put together by the DailyFX team.

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Source: DailyFX Economic Calendar


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Article Body Written by Diego Colman, Contributing Strategist for

— Individual Articles Composed by DailyFX Team Members

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