Last week, the international markets experienced significant fluctuations as the United States announced a decision regarding reciprocal tariffsThis development led to a brief spike in gold prices, which ultimately retreatedThe dynamic landscape of the market was evident in the performance of American and European equity indices, with notable gains on nearly all fronts.

To provide further insights, the Dow Jones Industrial Average saw an increase of 0.55% over the weekMeanwhile, the Nasdaq Composite surged by 2.58%, and the S&P 500 index followed suit with a rise of 1.47%. European markets exhibited similar resilience, as the FTSE 100 in the UK climbed by 0.37%, the German DAX 30 surged by 3.33%, and France's CAC 40 saw a notable increase of 2.58%. These movements illustrate a robust response from major stock markets as they adapt to evolving economic signals.

This week promises several key highlights, beginning with Federal Reserve Chairman Jerome Powell's testimony before Congress, along with the anticipated release of the Consumer Price Index (CPI) dataInvestors are particularly focused on the Fed's meeting minutes to gain clearer insights into the central bank's policy direction amidst ongoing inflationary pressuresNotably, purchasing manager indexes (PMIs) from the United States, Eurozone, and the UK are also set to shed light on the economic health of these regionsMeanwhile, Australia's central bank is expected to cut interest rates by 25 basis points, while the Reserve Bank of New Zealand may opt for a third consecutive reduction of 50 basis points, a direct response to regional economic challengesAlso noteworthy will be the CPI data from the UK, Canada, and Japan, which could sway interest rate trajectories.

Turning our attention to the United States, the focus remains on the resilience of its economyOn February 13, U.S. officials declared that reciprocal tariffs would be implemented, ensuring the same tariff rates are imposed on American goods as on those from trading partners

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This announcement came alongside Powell's reiteration that the Federal Reserve would not hastily move to further decrease interest rates; recent inflation data indicate a persistence that exceeds prior projections, lending support to the notion that rate cuts may be postponed.

As a result, the upcoming minutes from the Federal Open Market Committee's January meeting will garner significant attentionInvestors will seek to discern whether the discussion among policymakers reflects a readiness to amend their strategy if inflation risks intensifyAdditionally, the manufacturing and service sector PMIs for February will be revealed, adding to the market's narrative against a backdrop of fluctuating January data, with institutions predicting that these indicators may stabilize after earlier volatility.

With regard to commodities, the oil market demonstrated narrow fluctuations, as traders await clearer signs of supply and demand amidst ongoing trade tensionsThe WTI crude oil for near-term delivery experienced a slight weekly decline of 0.37%, settling at $70.74 per barrel, while Brent crude oil saw a modest rise of 0.11%, closing at $74.74. Goldman Sachs’ oil research chief, Strulven, articulated expectations that an imminent peace agreement could influence the global energy landscape, while also suggesting that short-term oil price risks might tilt upwards.

A similar sentiment in the gold market unfolded, prompting a rise before prices retreated againThe COMEX gold futures contract for February delivery increased by 0.57% to reach $2883.60 per ounceAccording to Grant, a senior metal strategist at Zaner Metals, recent price peaks have fostered technical avoidance of extreme highs, leading to profit-taking ahead of the weekend.

Allegiance Gold's COO attributed the sustained bullish trend in gold's market outlook to a confluence of factors, including tariffs, potential inflation, and a weakening dollarHistorically, gold has served as a hedge against rising prices and geopolitical uncertainties

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Furthermore, a substantial decrease in U.S. retail sales in January—marking the steepest drop in nearly two years—heightens the case for further easing by the Federal Reserve as it echoes fears of sluggish economic growth.

Shifting focus to Europe, the eurozone now faces increasing tariff pressures stemming from the U.S. announcementThe European Central Bank's Vice President, Guindos, acknowledged the significance of tariffs on steel and aluminum, highlighting the uncertainty generated by new U.S. policies, which could disrupt global economic growth through supply shocksHe noted that the inflation rate within the eurozone is edging closer to the ECB's mid-term target of 2%, suggesting that policy decisions will need careful consideration across successive meetings.

This week's release of the PMIs for February in France, Germany, and the wider euro area will be pivotal as businesses gauge the performance of the manufacturing sector against the preceding month’s trends, which benefited from improvements in manufacturing outputs and heightened growth expectationsMarket analysts anticipate that the ECB will cut rates by an additional 80 basis points this year based on the pricing of interest rate futuresAdditionally, the ZEW economic sentiment index will be published for both the eurozone and Germany, while France is set to release final CPI data for January and anticipate the consumer confidence survey results on the 20th.

For the UK, GDP data from the previous quarter and December show results exceeding expectations, which has marginally lowered the Bank of England's anticipated need for further easingEarlier adjustments by the Bank signaled a reduction in growth forecasts while simultaneously lifting inflation predictionsPresently, investors foresee a possibility of a further 55 basis points cut in interest rates for this year, with a 19% likelihood attributed to the March meeting.

Attention will also center on the PMIs for February in the service and manufacturing sectors, as they may provide critical insights into whether U.S. tariff initiatives are adversely impacting investment and consumer confidence

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