Global markets ended the week on a strong note, with the FTSE 100 reaching an all-time high of 8,505.22, supported by mining stocks and easing inflation concerns. US indices also rallied, with the Dow climbing over 300 points and the S&P 500 posting its best weekly performance since 2016. Positive economic data and strong earnings from major banks lifted investor sentiment, while mixed results in Asia-Pacific markets reflected varied regional dynamics. Oil prices recorded a fourth consecutive week of gains, while Gold pulled back slightly after testing key resistance levels.

Key Takeaways:

  • Dow Surges Over 300 Points: The Dow Jones Industrial Average climbed 334.70 points, or 0.78%, to close at 43,487.83. This marked its first weekly gain of the year, rising 3.7% for the week. The strong performance comes after a wave of encouraging economic data, including softer inflation readings and positive earnings from major banks, boosting investor sentiment.
  • S&P 500 Posts Best Week Since 2016 Election: The S&P 500 gained 1% on Friday to finish at 5,996.66, capping a 2.9% increase for the week. This marked its strongest weekly advance since November 2016, fuelled by optimism over easing inflationary pressures and hopes for multiple rate cuts later this year. The index’s rebound signals renewed confidence in equities after a challenging start to the year.
  • Nasdaq Rallies on Tech Gains: The Nasdaq Composite rose 1.51% on Friday to close at 19,630.20, with weekly gains of 2.5%. Big tech stocks led the charge, as Tesla surged 3% and Nvidia jumped 3.1%. The tech-heavy index has now achieved its best one-week performance since early December, driven by optimism in the semiconductor sector and stronger-than-expected earnings reports.
  • FTSE 100 Hits Record High: London’s FTSE 100 index surged 1.1% on Friday, closing at an all-time high of 8,505.22. The index rose more than 3% for the week, surpassing its previous peak of 8,445.80 from May 2024. Mining stocks were among the top performers, gaining 2% after reports of a potential merger between Glencore and Rio Tinto, which could mark the industry’s largest-ever deal.
  • European Markets Extend Gains Despite Weak U.K. Data: The pan-European Stoxx 600 climbed 0.68% on Friday, with all major sectors and bourses finishing in the green. Germany’s DAX gained 1.20%, closing 248 points higher, while France’s CAC 40 rose 0.98% and Italy’s FTSE MIB advanced 1.25%. This positive momentum came despite weaker-than-expected UK retail sales data, which showed a 0.3% monthly decline in December.
  • Asia-Pacific Markets Mixed as China’s Economy Outperforms: Asia-Pacific markets delivered mixed results, with China’s CSI 300 gaining 0.31% to 3,812.34, lifted by stronger-than-expected GDP growth of 5.4% in the fourth quarter. Hong Kong’s Hang Seng rose 0.21% in its fourth consecutive day of gains. However, Japan’s Nikkei 225 fell 0.31% to 38,451.46, while South Korea’s Kospi dropped 0.16% to 2,523.55. Australia’s S&P/ASX 200 dipped 0.2%, reflecting a cautious outlook among regional investors.
  • Oil Posts Fourth Straight Week of Gains: Despite slight declines on Friday, oil prices recorded their fourth consecutive week of gains, with Brent crude futures closing at $80.79 per barrel and West Texas Intermediate settling at $77.88. Weekly gains of over 1% were supported by U.S. sanctions on Russian energy trade, heightening supply disruption fears. Meanwhile, positive economic data from China further boosted demand expectations for the world’s top oil importer.
  • Treasury Yields Steady After Sharp Weekly Decline: US Treasury yields remained largely flat on Friday after a significant drop earlier in the week. The 10-year Treasury yield edged up 1 basis point to 4.617%, while the 2-year yield rose 4 basis points to 4.278%. Earlier in the week, yields fell sharply following softer-than-expected inflation data, reigniting hopes for multiple Federal Reserve rate cuts in 2025.

FX Today:

  • EUR/USD Holds Near 1.0266, Bears Dominate: The EUR/USD pair traded at 1.0266 on Friday, down 0.29% for the session, as it hovered near multi-month lows. Persistent bearish momentum, which began in July 2024, has driven the pair below key moving averages, including the 50-day SMA at 1.0466 and the 200-day SMA at 1.0777. Immediate support lies at 1.0200, tested in December 2024, with further downside targeting 1.0100 and nearing parity. On the upside, resistance is seen at 1.0300, while a recovery above the 50-day SMA is critical to reversing the bearish trend. 
  • GBP/USD Weakens Amid Disappointing Retail Sales: GBP/USD traded at 1.2167, down 0.58% for the session, as weak UK retail sales data weighed on the British Pound. December’s retail sales fell 0.6%, well below consensus expectations of a 0.3% rise, with downward revisions to November’s data further dampening sentiment. The pair remains near its lowest level since March 2024, trading below critical SMAs: the 50-day at 1.2579 and the 200-day at 1.2792. Immediate support lies at 1.2150, with a break below potentially pushing the pair toward 1.2100. Resistance is located at 1.2200, followed by 1.2300. 
  • EUR/GBP Climbs Toward Key Resistance: EUR/GBP advanced to 0.8436, up 0.27% for the session, extending its recovery from December’s low of 0.8300. The pair broke above the 50-day and 100-day SMAs, signalling short-term bullish momentum, and is now testing the 200-day SMA at 0.8422. Immediate resistance lies at 0.8450, with a breakout targeting 0.8500, a psychological level last reached in October 2024. On the downside, support lies at 0.8350, followed by 0.8300. 
  • USD/CAD Hits Multi-Year Highs as Uptrend Persists: USD/CAD climbed to 1.4477 on Friday, up 0.59% for the session, reaching its highest levels since May 2020. The pair has gained over 6% since November 2024, supported by strong buying interest and consistent support at the 50-day SMA at 1.4194. Immediate resistance lies at 1.4500, with a breakout potentially targeting 1.4600. On the downside, support is seen at 1.4400, with stronger levels at 1.4194. RSI remains in overbought territory, suggesting potential consolidation, but MACD reflects sustained bullish momentum. As long as USD/CAD stays above 1.4300, the uptrend is likely to persist, with buyers closely watching the 1.4500 level.
  • USD/JPY Rallies Amid Renewed Buying Interest: USD/JPY advanced 0.74% to 156.25, recovering from its earlier pullback this month. The pair remains well-supported by the 50-day SMA at 154.66 and the 200-day SMA at 152.75, reinforcing its bullish trend. Resistance is located at 157.00, followed by December’s high of 158.00. A break above 158.00 could extend the uptrend, with buyers eyeing the psychological 160.00 level. On the downside, support lies at 155.00, with additional support at 154.66.
  • Gold Edges Lower on Strengthening US Dollar: Gold prices slipped 0.43% to $2,702.12, pulling back from the key resistance level of $2,720, which has served as a strong barrier since August 2024. Despite the decline, Gold remains in a broader uptrend, having gained over 10% since December’s low of $2,460. Immediate support lies at $2,680, with further downside protection at $2,650. Resistance remains at $2,720, with the next target for bulls at $2,750. 

Market Movers:

  • Crypto Stocks Rally on Executive Order Speculation: Stocks tied to cryptocurrencies surged on Friday, driven by reports that President-elect Donald Trump is considering an executive order to make crypto a national priority. Coinbase shares jumped 4.9%, while Robinhood gained 4.5%. MicroStrategy and Mara Holdings, seen as Bitcoin proxies, rose 8% and 8.8%, respectively. 
  • Novo Nordisk Falls on Medicare Price Negotiations: Shares of Novo Nordisk dropped 5.3% after its semaglutide-based drugs, including Ozempic, Rybelsus, and Wegovy, were added to Medicare’s list for price negotiations. 
  • Qorvo Soars on Activist Investor Stake: Qorvo shares surged 14.4% after Starboard Value disclosed a 7.7% stake in the company, with plans to push for changes aimed at improving shareholder value. 
  • Life360 Jumps on UBS Upgrade: Life360 saw its stock rally 6.9% after UBS upgraded the company to “buy” from “neutral.” Analysts expressed increased confidence in the location-sharing app’s midterm ad revenue opportunities, citing strong growth potential and operational efficiency.
  • Intel Surges Amid Takeover Speculation: Intel shares popped 9.3% as the chipmaker remained a focal point of takeover speculation following its CEO’s departure in December. Despite being removed from the Dow in November and experiencing a 50% drop over the past 12 months, the stock rallied on hopes of strategic moves to revive its fortunes.

As the week draws to a close, the FTSE 100 breaking a record high has become a highlight of the global market rally, fuelled by strong performances in mining stocks and easing inflation concerns. US indices also showed strength, with the Dow climbing over 300 points and the S&P 500 delivering its best weekly performance in years. Asia-Pacific markets provided mixed results, while oil prices extended their streak of weekly gains. With encouraging data and market confidence on the rise, the focus now shifts to central bank policies and their impact on sustaining this momentum into the coming weeks.