Commodities Surge as Silver and Palladium Outperform

Hello traders, welcome on Friday morning as we wrap up the week with a focus on the market reactions from Thursday and what’s happening in the early hours of Friday.

Yesterday was a significant day for market watchers, particularly with the release of key data from the US. The big headline was the European Central Bank (ECB) rate cut, as anticipated, alongside US producer price index (PPI) data, which came in higher than expected at 0.2%, while core PPI hit 0.3%. The inflation numbers continue to be a mixed bag, adding more complexity ahead of next week’s Federal Reserve interest rate decision. As for unemployment claims, they were in line with expectations, doing little to sway the market.

The American Dollar had a volatile session yesterday, initially strengthening after the PPI data, but it quickly reversed and weakened towards the end of the session. This weakening dollar, along with ongoing concerns over inflation, fueled a rally in commodities. The Japanese Yen remained a standout performer, continuing its streak of strength, while safe haven currencies like the Swiss Franc saw increased demand. On the flip side, commodity currencies like the Canadian Dollar and Australian Dollar struggled.

Heading into Friday morning, we are seeing some consolidation across the markets. The dollar weakness persists, with USD/JPY hitting new lows as the Yen continues to gain. The Euro is holding steady after the ECB rate cut, while the British Pound remains under pressure following weaker-than-expected data from earlier in the week. Indices are trying to hold onto the gains from earlier in the week, but sentiment remains fragile.

In the commodities space, metals are still shining. Silver and Palladium are up significantly, leading the charge in the commodities sector. Gold is also performing well, hovering near its recent highs, while oil has shown signs of a modest recovery after a hammer candle formation earlier in the week suggested support was holding.

Looking ahead to the rest of Friday, the key data to watch will be the University of Michigan’s Consumer Sentiment report from the US, expected at 68.2. With all eyes on next week’s Fed rate decision, markets are likely to stay somewhat cautious as traders brace for potential volatility.

Source: https://www.axiory.com/analytics/market-news/commodities-surge-as-silver-and-palladium-outperfo