Markets Week Ahead: Gold, Dow, Euro-Area GDP, NFPs, BoE & RBA Eyed

Markets gyrated wildly this past week as traders reacted to a barrage of headlines ranging from central bank commentary and high-impact economic data releases to big tech earnings and GameStop stock price volatility. Global PMI data was fairly mixed with economic activity in the US shining most bright and lockdown-burdened UK posting a deeper contraction. GBP/USD eked out a modest 0.12% gain week-on-week nonetheless.

The US Dollar strengthened more broadly, however, as USD/JPY spiked 0.94% higher and EUR/USD stumbled -0.31% lower. ECB official Klaas Knot jawboned the Euro lower by flirting with the idea of another interest rate cut and Fed Chair Jerome Powell reiterated how the FOMC intends on keeping monetary policy highly accommodative.

Major equity indices like the Nasdaq faced selling pressure despite better-than-expected earnings from Apple and Microsoft. Investors seemingly turned skittish and laid off risk after brokerages and clearinghouses intervened to curb collateral impact from GameStop mania.

The VIX ‘fear-gauge’ spiked above the 30-handle as S&P 500 Index sank -3.31% on the week. Bitcoin advanced 3.80% and snapped the crypto’s two-week stretch of weakness. Across the commodity complex, silver prices surged 5.31% while gold and crude oil lacked direction.

Looking to the week ahead, markets could be in store for more volatility. Scheduled event risk on the DailyFX Economic Calendar highlights upcoming interest rate decisions from the Reserve Bank of Australia and Bank of England, the release of Eurozone GDP data, as well as employment reports out of New Zealand, Canada, and the United States.

Furthermore, traders will likely keep an eye out for stimulus headlines with democrat-controlled congress set to take up President Biden’s $1.9-trillion fiscal aid package. Earnings reports from Pfizer, Google-parent Alphabet, and Amazon are also on tap to cross market wires next week. That all said, with month-end flows in the rearview mirror, liquidity conditions and trader sentiment stand out as two key drivers of where markets might head next. What else are our analysts expecting in the week ahead?

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