Can the past week be described in one word? If so, it would definitely be 'tension'. In the financial markets, we experienced a full range of emotions, from optimism to uncertainty, all due to inflation and sales data from various corners of the globe.
The week began with exciting data from Canada, where despite the forecasted increase in CPI m/m, the actual result turned out to be slightly lower. This caused a brief stir, although optimism in the markets remained strong. Investors looked enthusiastically at the rising Fear & Greed Index, which indicated greed, suggesting a greater willingness to take risks.
New Zealand surprised at the beginning of the week when a higher-than-expected CPI for the first quarter was announced. This led investors to speculate about potential moves by the central bank, contributing to gains in the stock and commodity markets. On Wednesday, attention turned to data from the United Kingdom, where CPI inflation reached the expected level of 3.3%, maintaining tension among investors.
The culmination of the week occurred on Friday when retail sales data for the UK was released. A surprising increase of 0.7% compared to the expected stabilization highlighted the strength of the British consumer and sustained positive sentiment in the markets. This event was like the proverbial cherry on top for investors, who welcomed this news with satisfaction.
In summary, this week was full of unexpected twists that boosted optimism in the markets. It is worth noting that despite the volatility, the Fear & Greed Index remained in the greed zone, suggesting that investors are willing to take risks. In the coming days, it will be important to monitor how this data affects interest rate expectations, and also to remember that cryptocurrencies do not observe weekend breaks.
