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Weekly Focus: ECB, PCE, U.S. GDP and First Big Tech Reports

The S&P 500 broad market index futures showed a modest increase of 0.2%, reaching 4854 points this week, following a noteworthy surge of 1.3% the previous Friday. The index set a new record at 4842 points, with the potential for more all-time highs soon.

However, caution is advised among investors as capital outflows from the SPDR S&P 500 ETF Trust (SPY) persisted for the fourth consecutive week. Despite the ongoing upward momentum, investors are opting to take profits, overlooking potential buying opportunities. Additionally, bets on a Federal Reserve (Fed) interest rate cut in March dropped to 44.0%, down from 73.0% at the start of the previous week, according to the FedWatch Tool. The U.S. 10-year Treasuries yields responded with a slight rise to 4.19%, maintaining levels not seen since December 13. The diminishing belief in rate cuts in March is evident, with San Francisco Federal Reserve Bank President Mary Daly expressing that it is "premature" to anticipate imminent interest-rate cuts.

The upcoming week is a blackout period for the Fed, meaning no comments from Fed officials are expected as they prepare for the meeting on January 30-31. Meanwhile, major central banks, including the Bank of Japan, the Bank of Canada, and the European Central Bank, are set to hold their meetings this week. Any indication of persistent inflation pressures leading to an extended period of high-interest rates could impact the U.S. Dollar. The S&P 500 index is likely to remain stable amid this news.

Notably, big tech companies Netflix (NFLX) and Tesla (TSLA) are reporting this week, and the U.S. Q4 2023 GDP first estimate will be released on Thursday. Analysts expect a 2.0% QoQ growth, with the Atlanta Fed GDPNow model suggesting an increase to 2.4%, up from the previous estimate of 2.2%. If these estimates are confirmed, investors may be convinced that fund rates will remain unchanged in March.

The S&P 500 broad market index is on the brink of reaching new all-time highs, having reached the final upside target at 4850-4950 points. While potential reversal patterns should be anticipated, none are apparent at this point.

Oil prices are consolidating below $80.00 per barrel for Brent crude, with another upside attempt expected. Ongoing tensions in the Middle East are moving prices away from the $74.00-76.00 per barrel support, and further movements are contingent on developments in the Middle East conflict.

Gold prices, which previously reached mid-term upside targets at $2000-2100 per troy ounce, are currently testing the support at $2010-2030 per ounce. A potential technical weakness period could lead gold prices to $1920 if the support at $2010 per ounce is breached.

The Greenback is weakening, potentially indicating another wave of the upcoming downside correction. This scenario is supported by the sell-off of the Dollar last week at its highs. Monitoring potential reversal signals is advisable, as the Dollar may strengthen unexpectedly, despite the EURUSD potentially rising to 1.11500-1.12500.