This week's financial markets saw a mix of positive and negative trends. The US Dollar strengthened, reaching a two-year high, while US equities underperformed. Gold remained volatile amidst competing narratives, while Oil prices surged but faced a less optimistic outlook for 2025.
A week that started in 2024 and ended in 2025 showed glimpses of what many had been expecting from the year ahead. 2025 started on the front foot. The DXY has hit a two-year high above the 109.50 handle. A sign of things to come? US Equities disappointed with regards to the Santa Rally this year. The S&P 500 index suffered 5 successive days of losses beginning on December 26.
However, as discussed in my Thursday article titled (Update – Are Wall Street Indexes Set for a January Jump?), January or at least the first half of January has historically been a positive month for US stocks. Looking at fund flows, data from LSEG Lipper showed that investors added a net $4.93 billion worth of global equity funds, an 86% drop in inflows compared with about $35.1 billion worth of net purchases in the prior week. This has been attributed to rising bond yields as prices edged higher this week but remain largely rangebound. The reason for Gold’s malaise can be summed up by looking at all the competing narratives at play. Donald Trump’s proposed tariffs are likely to lead to a stronger US Dollar but the uncertainty surrounding the global economy, geopolitics and the impact of tariffs are likely to keep safe haven demand in play. This makes the precious metal an intriguing proposition in 2025 and it will be interesting to see how prices and policy from the incoming US administration develops. Oil enjoyed an excellent week following 7 or 8 weeks of consolidation. Brent is up around 4% for the week as US stockpiles continue to decline. The 2025 Oil outlook is not positive however as a recent Reuters poll indicated. Analysts are eyeing around $70 a barrel for Brent in 2025 after losses of around 3% in 2024 and a closing price of $ 75.19 a barrel.The week ahead in the Asia Pacific region still remains light on the data front. The highlights include the Caixin Service PMI due on Monday from Chin
US Dollar Stocks Gold Oil Prices 2025 Outlook
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