A week dominated by central bank communications and seasonal dynamics kept investors on edge, even as the UN General Assembly passed without major geopolitical surprises except for some memorable US President Trump quotes.
Instead, markets focused on Fed officials and their global counterparts weighing in on shifting economic conditions.
Powell’s Rhode Island appearance delivered another shift to Market focus, highlighting rising downside risks to employment and how hiring momentum has “dropped very sharply.”
Fed Governor Bowman, a known dove, pushed the point further, calling for a more proactive stance to avoid falling “behind the curve”.
Further north, Bank of Canada Governor Macklem stressed that trade is under attack, citing a sharp slowdown in exports and weaker investment trends tied to US policy uncertainty.
He also had a few words to say on the FED’s independence and shed some light on Jerome Powell’s solid performance amid all the menaces.
Markets responded in seasonal fashion, following the classic “sell Rosh Hashanah” adage pattern as volumes thinned and equities corrected from recent highs, leading to a three-day correction in Equities.
Happy New Year to those who celebrate, and peace to markets and communities alike.
Powell’s reminder that “equity prices are fairly highly valued” added pressure, with the S&P 500 and broader indices retracing into familiar September headwinds.
The US Dollar, however, stood out, rallying on strong technical catalysts and better-than-expected US data that pushed back against optimistic 2026 rate cut bets.
Resilient job numbers, as seen in the latest Jobless Claims report, and decent macro conditions for now helped the greenback regain ground, underscoring the relative strength of the US economy against global peers.
A tense vibe can also be seen in the latest headline from US Secretary of War Pete Hegseth, who is convening all army generals next week.
This vibe actually might have been one of the reasons for such a huge performance in metals, with Gold again marking fresh record highs on Tuesday, Platinum reaching 12 year highs and Silver pushing to reach new all-time highs, breaching $46 just today.