Weekly Market Commentary
Non-Farm Payrolls missed expectations, adding 157,000 new jobs, where expectations were for closer to 200,000. The markets shook this off, as previous months have all be upscaled and expectations are that July will be also. The Fed left rates unchanged, but bullish rhetoric has been extremely encouraging, thus expectations are for rises in September and December. The Dollar rallied strongly, with the EUR sliding to 1.1550, while the GBP tests the Big figure of 1.3000.
China announced tariffs on up to US$60 Billion of US imports and in retaliation for the US sanctions, in what appears to be a game of brinksmanship, while their can be only one winner. China is a factory and the US is the biggest market, so the boot is definitely on the foot of Trump. The US/EU agreement and promise of a NAFTA reconciliation, has put even more pressure on the Chinese. This is the battle that impacts China's primary suppliers, who are heavily trade exposed nations, in the form of Australia and NZ. Their currencies are reflecting this vulnerability, with the AUD slipping below 0.7400, while the NZD melted down to low 0.67's.
The major Central Banks, of the US, England and Japan, all had their say last week, with no major surprises. The Antipodean Central Banks will be closely watched in local markets, but no change should be expected, with neutral to bearish rhetoric. The US CPI number will be closely watched and should reflect the robust state of the world's largest economy. UK GDP numbers may encourage some enthusiasm, in a sea of negativity, that surrounds 'Brexit'.
Weekly Market Calendar
6/8 China Current Account, NZ Dairy Auction, US Weekly Mortgage Applications, NZ Commodity Prices, Australian Job Ads, German Factory Orders
7/8 Australia Consumer Confidence, RBA , Japan Leading Index, German Trade Exports/Imports, German Industrial Production, UK House Prices
8/8 Japan Current Account, China Trade Exports/Imports, US Weekly Jobless Claims, RBNZ
9/8 NZ Home Sales, China CPI/PPI
10/8 NZ Credit Card Spending, Japan GDP, UK Trade Exports/Imports, UK Industrial/Manufacturing Production, UK GDP, US CPI
Paul Bettany
Collinson & Co
0406-744-923
paul@collinsonfx.com