In the final days of the quarter, the US dollar experienced a significant rally, recovering losses from earlier trading sessions and reaching new highs. This surge in the dollar was particularly evident in the USD/CAD pair, as oil prices reversed and ended the week flat. Treasury yields initially declined but later rebounded, leading to a decline in equity markets, which ultimately finished the week mostly unchanged after a strong start. The reasons behind these movements were primarily due to quarter-end flows rather than underlying fundamentals, although the latest PCE report indicated slightly soft inflation numbers and a dovish stance from Williams.
One notable casualty of these market shifts was gold, which experienced a significant drop and reached its lowest point since mid-March. Prior to the North American trading session, the US dollar had been weaker, but it quickly gained strength and ended the day largely unchanged. As the week, month, and quarter came to a close, attention turned to observing October seasonals, with further analysis expected over the weekend.
In summary, the final days of the quarter witnessed a surge in the US dollar, erasing earlier losses and reaching new highs. This impacted various markets, such as the decline in oil prices and the subsequent flat finish for the week. These movements were largely influenced by quarter-end flows rather than fundamental factors, despite softer inflation numbers and a dovish tilt from Williams. Gold experienced a significant dip to its lowest point since mid-March. The US dollar initially started weaker but gained strength during North American trading, ultimately ending the day largely unchanged. Observations of October seasonals were expected in the following weekend.