Tech leads the charge as bulls finish the week strong

In currency markets, the dollar has rallied a touch, continuing its volatile week of sharp moves in both directions. The Dollar Index has bounced back off Monday’s multi-year lows, recovering from previous softness and leaving the yen and Swiss franc — yesterday’s winners — lagging. Though sentiment remains roughly balanced now, the shift reflects a renewed appetite for risk and rotation out of haven plays.

Gold took a sharp hit, falling back below the $3,300 level and, this time, dragging silver down with it. In recent sessions, the two precious metals had diverged. The move may signal a broader shift, away from safety, and back towards beaten-up risk assets.

Front-month WTI crude pushed above $63 per barrel in early trade, but it has pulled back from its best levels today. The key focus remains on OPEC and supply dynamics, which have kept a lid on bullish enthusiasm throughout the week. Meanwhile, natural gas remains under pressure, sliding for a ninth consecutive session, now firmly below the $3 btu mark and in increasingly shaky territory.

Crypto markets moved modestly higher overnight, as it continues to consolidate following its recent strong rally. Bitcoin now trades in the mid-$90,000s but needs to reclaim $100K to reenergise the bull camp and shake off recent hesitancy. Ether and other major tokens followed suit, but the broader sector still appears tied closely to risk appetite.

The VIX continued its decline, as the front-month contract fell below 24.00 before regaining some lost ground. Investors have grown more comfortable with the current landscape. After surging earlier in the week, the volatility index has now retreated sharply, reflecting a market environment that has shifted from panic to cautious optimism.

While still elevated relative to calmer periods, the VIX’s move lower is a clear sign that investors are leaning back into risk, emboldened by some strong earnings as the first quarter results come through, which are helping to improve sentiment. The pullback also coincides with a more measured tone in US futures and steadier moves across equities, hinting that, for now, the worst of this week’s turbulence may be behind us.

Still, the pace of change remains fast, and with key earnings and data ahead, the VIX remains a critical gauge to watch.

On the data front, the UK posted a better-than-expected retail sales figure, printing at +0.4%, a positive sign for consumer strength heading into the spring.

Later today, US Michigan sentiment data is due, with particular attention on the inflation expectations component — a figure the Fed will be watching closely.

Elsewhere, the IMF meetings continue, and traders are already turning their attention to next week, which will be a big one. Tech giants Amazon, Apple, Microsoft, and Meta Platforms headline a packed earnings calendar, while US jobs data stands as the main macro event, which is sure to shape sentiment into next month.

This week has seen a big bounce-back in equity prices, led by the tech sector.  Alphabet’s solid beat last night and broader earnings momentum have recharged the risk-on narrative, while the dollar’s resilience and retreating volatility offer further comfort.

Gold has wobbled, but the bigger story is gas, which has seen increasing downside momentum. Meanwhile, cryptocurrencies continue to consolidate, a move that bullish investors hope is a precursor to fresh all-time highs.

With a quieter day likely ahead and weekend headlines looming, the bulls are hoping to close the week with a win. But as always, sentiment is fragile, and the tape remains headline sensitive.