Federal Reserve Chair Jerome Powell hinted that the central bank is nearing a potential interest rate cut, stating they are "not far" from the needed confidence that inflation is sustainably moving towards the 2% target. His remarks before the Senate Banking Committee raised expectations of a rate reduction in the coming months, in confluence with the unusual volatility in the gold price. In Europe, ECB President Christine Lagarde indicated the ECB may lower rates in June but needs more evidence before considering cuts. Both central bank chiefs are careful in balancing economic stimulus and a cautious approach to avoid an even more fatal economic disaster, which is reinflation. Investors are closely watching to ensure interest rate decisions remain purely data driven as the U.S. election cycle approaches, avoiding any perception of political motivation.

EQUITY

The S&P 500 continued to make another record close, spearheaded by tech giants, as Fed Chair Powell reinforced expectations of rate cuts in 2024. Nvidia's rally in an unending thirst for chips propelled the tech sector higher, spreading to other chipmakers. Better earnings from retailers like Kroger made it the day's biggest gainer while Victoria's Secret suffers from weak projection.

GOLD

Mounting expectations of U.S. monetary easing drove gold prices to unprecedented levels. The precious metal's meteoric rise all week was amplified by sustained central bank buying and safe-haven demand away from the money market. Traders aggressively priced in a potential June rate cut by the Fed, although it remains unclear whether it would bear fruit.

OIL

Sturdy demand in the United States, where gasoline inventories plummeted to 4.5 million barrels, supported the price, although it remained rangebound in the daily timeframe. Simultaneously, China's crude oil imports saw a 5.1% year-on-year increase in the first two months of 2024, indicating a positive outlook on its economic recovery. Venezuela's Citgo Petroleum reported an 81% decline in net profits in Q4 2023, attributed to refinery outages and weaker margins, although still positive yearly.

CURRENCY

The dollar stumbled across the board in light of Fed Chair Powell's testimony. The euro surged to a six-week high against the weakened greenback, underpinned by the ECB's acknowledgment of cooling inflation while cautiously paving the way for potential rate cuts later this year. Meanwhile, the yen shot up versus the dollar on growing speculation that the Bank of Japan could finally raise rates this month, aggravating short positions in the Japanese currency.