If weeks in the financial markets could be compared to seasons, last week definitely resembled autumn – full of changes and transitions that can easily be overlooked but have deep consequences. It started inconspicuously, like the calm before the storm, but brought many key events that could define the upcoming months.
Monday marked a calm start, but Tuesday's data from Germany regarding the manufacturing PMI drew attention. The result of 51.7, exceeding expectations, was like a spring ray of hope for the German economy, indicating potential recovery in the industrial sector. However, the services sector, with a score of 51.2, reminded us that not all branches of the economy are growing equally dynamically.
Wednesday and Thursday brought us inflation data. The CPI in the USA, both year-on-year and month-on-month, showed that inflationary pressure is somewhat lower than expected. The annual inflation rate of 3.7% was below forecasts, which may provide some relief to consumers and policymakers. However, the stability of commodity prices does not mean the end of problems – challenges remain.
When Friday arrived, all eyes turned to the retail sales figures in the UK. The decline of 0.4% was smaller than expected, which can be considered a positive surprise. What could have appeared as another step towards recession turned out to be just a minor stumble that may preserve confidence in the British economy.
Looking at all of this, one could say that the markets resemble a minefield now, where every step must be carefully considered. The extreme fear currently prevailing among investors, with a sentiment level of 10/100, indicates that we are in uncertain times. The upcoming weekend is a time that investors can dedicate to strategy analysis, especially since cryptocurrencies, as usual, will remain active even then.
