Gold and oil Surge, concluding a profitable week for commodities

European stocks continued their upward trajectory, building on the momentum from February. Eurozone CPI data for February indicated core prices hovering just above 3%, slightly down from January but still suggesting resilience, with a smaller-than-expected deceleration:

Euro Area CPI Inflation for February:

Headline: 2.6% YoY (expected: 2.5% YoY, previously: 2.8% YoY)

Core: 3.1% YoY (expected: 2.9% YoY, previously: 3.3% YoY)

Dollar Vs Gold

The dollar remained relatively stable despite fluctuations in the bond market, with 10-year Treasury yields oscillating between 4.22% and 4.28%. Meanwhile, gold experienced a notable increase, climbing from $2,040 to $2,057 before settling around $2,050 at the opening of the US session. This surge in gold prices was fueled by firm expectations of a Fed rate cut in June, despite remaining inflation pressures. As Fed's Barkin commented on yesterday's inflation report, describing it as indicating high inflation levels. He emphasized that the economy is still experiencing rising prices across various sectors. While inflation appears to be moderating, Barkin stressed the importance of observing further developments to ascertain the extent of adjustment required to reach the 2% target. He emphasized that he is not eager to implement rate cuts hastily.

Oil

Oil prices surged near $79 ahead of the US opening bell, capping off a profitable week for the commodity. Investors are awaiting OPEC's meeting and if it will bring an extension to the current production cuts into the second quarter.

As earning season is coming to an end, the markets brace for upcoming events; including Fed Chair Jerome Powell's testimony before Congress and February labor market data next week, investor focus will shift to the interest rate outlook and its implications for various asset classes.