European stocks ended the day relatively flat while tech is enjoying a bounce in the US on the back of a spike in jobless claims, perhaps an early sign of the labor market weakening.
A well-timed spike in US jobless claims
Jobless claims spiked last week in what could be the start of another trend higher after stabilizing over the last few months. Claims had been expected to rise much earlier than this but for one reason or another, they've stayed remarkably steady. It's also worth noting that this is only one release so unless it's backed up by more of the same, we can't read much into it. But the timing ahead of next week's Fed meeting is interesting as it may add just a tad more comfort to policymakers leaning towards holding rates steady.
Oil remains volatile but below pre-US regional banking crisis range
It's been a very choppy week in oil markets, with traders forced to digest the latest compromise deal from OPEC+ against the backdrop of more interest rate hikes and dampening prospects for the global economy. Resilience in the economy now is impressive but the longer it lasts, the more it will be met with higher interest rates that could ultimately deliver a harder landing.
That oil failed to break back into the band it was trading in between December and March despite a further cut from Saudi Arabia says everything about traders' views on the economy. Not to mention that it will infuriate the Saudis who have once more failed to manipulate the price higher. What more can they realistically do?
Brent has been firmly entrenched in the $70-$80 range for more than a month now and if Saudi Arabia can't get the rest of the alliance on board before the end of the year, you have to wonder what the bullish case for crude will be. Stronger growth is obviously one but that isn't exactly conducive to ongoing rate hikes and stubbornly high inflation.
Gold choppy ahead of US inflation and the Fed next week
Gold has also been very choppy in recent weeks with the lack of conviction in the economic data not helpful in tipping the balance one way or another. The yellow metal has broadly traded between $1,940 and $1,980 and traders may now have an eye on the US inflation data on Tuesday, a day before the Fed meeting.
These events may ultimately determine whether gold breaks higher once more with potential record high ambitions or continues to correct lower, having so far fallen almost 7% from the March highs.
Bitcoin reaping the rewards of safe haven status
It's been a rough week for the crypto space, with the SEC lawsuit against Binance and Coinbase causing significant uncertainty about what this means for exchanges and the coins traded on them. Of course, this was always likely at some stage with the two sides having not seen eye to eye in the past and this could ultimately lead to a clearer regulatory regime and less hostile environment in the future. But at what cost?
Bitcoin has held up surprisingly well, with crypto traders seemingly seeking out more established cryptos that appear relatively shielded from the SEC action in times of such uncertainty, rather than abandoning the space altogether. If the situation intensifies, that may change, but for now, bitcoin appears to be reaping the benefits of being cryptos safe haven.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.