Weekly Market Commentary
Markets closed positively, after a volatile week, dominated by the Brexit chaos enveloping Europe and the ongoing trade negotiations between the US and China. The Brexit chaos has been reverberating through Europe for more than 2 ½ years and looks set to continue for at least another 3 months. The UK Parliament has rejected PM Mays deal and now rejected the 'No Deal', insuring that their will be no easy out and removed the key bargaining chip May held in negotiations with Europe. The UK is in a disastrous predicament with no easy way out. The disconnect between the people (who voted to Leave) and the ruling class (who majority want to Remain) will end in tears. The GBP regained ground, moving towards 1.3300, while the EUR has also managed to push back above 1.1300. Chaos and disruption will continue for at least another three months across Europe.
The US/China Trade negotiations roll on and outcome speculation continues to drive markets. Steve Mnuchin (Treasury Secretary) announced that the conclusion and signing summit would not be held in March, as anticipated, after President Trump extended the deadline from March 1. Reports that the Chinese Vice Premier held a conference call with Treasury Secretary Mnuchin and Chief negotiator Lighthizer and progress was said to have been made. Markets rallied on the news to close the week. US Bond yields were softer, as was the Dollar, allowing the commodity currencies to hold. The AUD held 0.7080, while the NZD traded 0.6840, although NZ preoccupied and shocked by a massive terror attack Friday.
The Bank of Japan held interest rates and maintained QE, tempering positive sentiment towards global growth prospects. This coming week will concentrate on an avalanche of economic data and Central Bank activity. The Fed and the Bank of England will be out in the market, both dovish due to Geo-Political circumstances, while the RBA release the latest minutes.
Weekly Market Calendar
18/3 Japan Trade Exports/Imports, NZ Dairy Auction, Japan Industrial Production, EU Trade, NAHB House Market Index
19/3 NZ Consumer Confidence, Australia Consumer Confidence, RBA Minutes, UK Employment, German/EU ZEW Economic Sentiment, US Factory Orders, US Durable Goods Orders
20/3 NZ Current Account, Bank of Japan Minutes, UK CPI, US weekly Mortgage Applications, FOMC Meeting
21/3 NZ GDP, Australian Employment, NZ Credit Card Spending, ECB Economic Report, Bank of England Rate Decision, UK Retail Sales, Philly Fed Report, US Weekly Jobless Claims, US Leading Index, EU Consumer Confidence
22/3 Australia Manufacturing/Services/Composite PMI, Japan CPI, France/German/EU Services/Manufacturing/Composite PMI, US Services/Manufacturing/Composite PMI, US Existing Home Sales, US Budget
Paul Bettany
Collinson & Co
0406-744-923