? S&P breaks five-week earning streak with 0.7% loss

? U.S. equities expect headwinds from hawkish Fed, earnings season

? EUR/USD loses 0.9%, amid hawkish Fed commentary

? GBP weakens as Brexit concerns continue

? Gold prices visit monthly low

After five consecutive weekly gains, the S&P 500 (SPY) saw its four-day weekly session conclude with a 0.7% loss. All good things must come to an end, but this time it was backed by considerable headwinds from global development. Namely, mounting concerns that the Fed has a real intention to hike rates again, possibly even as early as April. The decline also dragged the index to a mere 0.9% over its 200 day moving average. Concerns were running high as next week’s Friday Nonfarm payrolls, and the ADP, are prone to indicate continued strength in the U.S. labor market. It was further supported by commentary made this week by the Fed’s St. Louis President, James Bullard, who commented on Thursday that the next U.S. rate hike “may not be far off, provided that the economy evolves as expected”.

Next week is also marks the end of the first quarter. This too weighed on U.S. equity as in spite of the solid U.S. labor market and rising inflation, continuing to show a strong gain in profits in the quarter is poised to prove non-trivial.

Losses in the S&P were more evident in the banking sector this week, with JPMorgan (JPM) losing 1.7%, summing to a 10.7% loss since the start of the year. The Dow (DIA), meanwhile, saw a more modest weekly loss of 0.5%, as did the Nasdaq (QQQ).

In addition to the negative U.S. mood, European equity faced some headwind from Tuesday’s attack in Brussels, though perhaps less than one might expect. The DAX declined 1% during the week, with a strong 1.4% loss on Wednesday and Thursday. The CAC 40 was even more pessimistic with a 3% weekly decline.

A strengthening Dollar, and its side effects

Obviously, the implementation of more hawkish policy has its virtues. The U.S. Dollar, namely, has had quite a strong week, adding 1.4% vs. the JPY and 0.9% vs. the EUR. These gains aided the Greenback to an impressive recovery from the losses incurred from the Fed’s refraining to hike rates on its March 16th meeting. The gain in EUR/USD since the no-hike announcement moderated to about +0.8%, after peaking to 2.3%. The U.S. Dollar also strengthened by about 2.4% vs. the Sterling this week, some of this was the latter experiencing general weakness amid the continuing concerns of a Brexit in June.