Oil Continues to Slide as Gold Takes a Breather Near All-Time Highs

Hello traders, welcome to Friday morning! We are starting the European session after a very eventful Thursday, and it looks like today will continue with volatility across the markets.

The highlight of Thursday was undoubtedly the interest rate decision from the Eurozone, where the European Central Bank (ECB) delivered the expected 25 basis point rate cut. This moved the rate to 3.4%, and while the cut was anticipated, it still affected the Euro, which experienced slight weakness as traders priced in the outlook of a more dovish stance from the ECB moving forward.

We also had retail sales data from the US, which surprised to the upside, coming in at 0.5% versus the expected 0.1%. This strong data reaffirmed the strength of the US consumer, pushing the US Dollar higher throughout the session. 

In Australia, job data came in much better than expected, which gave the Australian Dollar a much-needed boost after days of weakness. The Australian economy showed resilience, which lifted sentiment for AUD/USD, pushing it higher as the US Dollar slightly corrected in the Asian session.

On the commodities front, gold continued to set the new all-time highs. Oil, on the other hand, had a much more difficult session. 

Looking at Friday, we already had some data come in. Chinese industrial production and retail sales were released earlier today, both coming in above expectations, which added positive sentiment for Asian indices. European and American markets are digesting this news, and we’re awaiting the release of building permits data from the US later in the day.

On the currency market, the British Pound continues to be one of the strongest currencies, driven by better-than-expected UK retail sales. Meanwhile, the US Dollar is holding firm, continuing to capitalize on Thursday’s strong retail sales numbers. New Zealand Dollar and Australian Dollar are showing some stability, with AUD supported by positive job data from Thursday. 

Indices this morning are mixed, with European futures slightly in the red after Thursday’s gains. S&P 500 and Dow Jones futures are also pointing to a possible flat or slightly bearish open. Today’s session will likely be more about digestion of yesterday’s moves, though we could see increased volatility during the US building permits release later today.

Source: https://www.axiory.com/analytics/market-news/oil-continues-to-slide-as-gold-takes-a-breather-ne