Three markets to watch next week (21.03.2025)

This week, the key event was the FOMC conference and Jerome Powell's speech. The Federal Reserve emphasized the high level of uncertainty surrounding market forecasts in the coming weeks. This view is shared by investors as well. Capital is still trying to flee to safe-haven assets such as gold, which is recording record gains. In the upcoming week, we will learn, among other things, the final GDP report from the US for the fourth quarter, the PCE inflation data from the US, and the preliminary PMI reports for March. It will be worth observing instruments such as Gold, EURUSD, and DAX.

GOLD

After the FOMC conference, investors are pricing in a slightly more dovish approach from the Federal Reserve toward monetary policy in 2025. The implied interest rate suggests 71 basis points of easing, which means nearly three 25-point cuts. As Jerome Powell noted, we are currently in a very uncertain phase of the cycle, making long-term forecasts difficult. Low confidence is also visible in the market, where global capital, including many central banks, is fleeing to gold, converting part of their reserves from dollars. This week, gold broke through the $3000 per ounce barrier, gaining over 16% since the beginning of the year. In the coming week, as we approach the announcement of the US reciprocal tariff policy toward all trading partners on April 2nd, we can expect new information in this area. Rising tensions between countries or unexpected decisions by the Trump administration will encourage capital to invest in gold—and the opposite is also true. With the commodity reaching new highs, it will be worth watching its performance closely.

EURUSD

In terms of the macroeconomic calendar, the upcoming week will be somewhat calmer than the previous one. However, we will still get a few interesting releases such as the PCE and GDP data from the US. Additionally, throughout Monday, preliminary PMI reports for March will be published from countries including Germany, France, the Eurozone, and the US. Any surprises in these reports will impact market volatility. Furthermore, for the currency market, Trump's aforementioned trade policy and the potential escalation of the conflict in the Middle East remain key themes.

DAX

Also during this week, the German DAX index reached new highs. The rally was driven by the German government's adoption of a €500 billion stimulus package for defense and infrastructure spending. In this wave of euphoria, investors pushed the German index above the 23,000-point level. Now, the key factor may be the pace of implementation of these plans and the timeline for their execution. As the market becomes more familiar with the package, it is possible that we will see some profit-taking, which could be further supported by deteriorating sentiment across the broader stock market.