US consumer inflation, as measured by the PCE Price Index, dipped to 2.4% year-over-year in January, meeting expectations and minimising volatile market reactions to the news. The Fed's preferred gauge, Core PCE, also hit the forecast at 2.8% year-over-year. Although the pace of inflation is hotter than the previous eight months, analysts believe the Fed will stay on track to cut rates in June due to seasonal factors, with 50% chances, as tracked by CME FedWatch.

EQUITY

The stock market cheered as inflation eased, falling to its lowest level in two years, raising hopes for an interest rate cut from the Fed. However, retail earnings were mixed, with tech stocks like Salesforce and Okta shining, while Snowflake fell as its CEO retired. Lawmakers also made progress in avoiding a government shutdown, adding another layer of stability to the market outlook. Across the sea, German stocks notched another all time high as inflation dipped to a 21-month low of 2.5% in February.

GOLD

Gold prices edged higher on Friday after U.S. consumer inflation data were spot on. The data confirmed the likelihood of a rate cut in the coming months, which would boost the appeal of gold as Treasury yields hit strong resistance. Despite some pressure factors, like negative ETF flows and Bitcoin competing as "digital gold", it remains supported by central bank buying as a physical store of value.

OIL

Oil prices are expected to close slightly higher this week as major producers are likely to maintain production cuts and tighten supply. While concerns about slowing Chinese demand and rising interest rates could limit the price cap, the market sees a tighter market in the coming months due to production cuts and strong physical demand. This mixed bag of factors is keeping oil prices in a relatively narrow range for now.

CURRENCY

The dollar traded higher against the euro and yen on Thursday, on track for its second monthly gain in a row. This came after inflation data was higher in January, easing the early rate cut. The yen gained briefly after a Bank of Japan official hinted at the possibility of tighter monetary policy but later gave up those gains. Bitcoin held near a two-year high, on track for a 45% monthly gain on ETF buying and halving events expected to be in April.