Market sideways as investors await key events

Gold maintains its position near a two-month high, supported by weak US Manufacturing PMI data

By Farah Mourad | 4 March 2024

Market close
  • Q4 2023 earnings season wraps up

  • Markets await Jerome Powell's testimony

  • Brent and WTI prices have climbed to multi-month highs

At the beginning of the week, markets are exhibiting a trend of lateral movement, indicating investors' anticipation of numerous significant events approaching.

As Q4 2023 earnings season draws to a close on Wall Street, the majority of large US companies have already reported their financials, with over 90% of earnings season completed for the Dow Jones, S&P 500, and Nasdaq-100 indices. While some smaller companies are yet to report, all eyes are on Jerome Powell's semi-annual Humphrey Hawkins testimony to Congress. Investors eagerly await insights into how inflation pressures may influence future rate cuts, amidst growing expectations of nearly 90 basis points of Fed cuts this year.

The Euro Zone

The euro experienced a brief ascent, reaching as high as 1.0857, before retracing slightly by 15 pips as German indices soared to record highs on the back of robust corporate earnings. Anticipation builds for the ECB meeting, where clarity on wage growth could prove decisive for timing rate cuts.

Gold vs US dollar

Gold price continues to trade near a two-month high, hovering around $2,080 with the opening of the US session, ahead of a data-packed week. After the weak US Manufacturing PMI data weighed heavily on the US Dollar, further bolstering gold's appeal as a safe-haven asset, potential catalysts for gold prices would be closely watched. This week promises a flurry of top-tier economic data, including ISM services and non-farm payrolls.

Oil market

Following OPEC+'s decision to extend production cuts until the end of the second quarter, oil futures are experiencing slight increases. Brent and WTI prices have climbed to multi-month highs, buoyed by signs of tight supplies in the physical market and geopolitical tensions in the Middle East, which might create continuous support for oil prices, albeit with cautious optimism.