Weekly Market Commentary
US Equity markets headed back towards record levels, as confidence and risk-off sentiment, surged through markets. The ECB added further QE to stimulate the money supply, looking to arrest the long slow fall into recession in the EU, while global growth sentiment surges after progress in the US/China trade war. President Trump delayed $250 Billion in tariffs, while the Chinese deferred some tariffs and agreed to increase US agricultural imports, boosting hopes of an agreement next month. Trump has indicated he may accept an 'interim agreement', which may break the stalemate and allow 'normal' trade to resume.
US markets rallied strongly on the developments, with rising confidence and risk-off sentiment. Share markets approached record highs, bond yields spiked and Oil and Gold prices drifted lower. The University of Michigan Economic Sentiment reported strong gains and Retail Sales pushed upwards. The good news keeps coming. The coming week will be headlined by Central Bank speculation and action, with the Fed, Bank of Japan and Bank of England all announcing rate decisions and action on monetary policy. The Fed is expected to cut rates, while the Bank of England and Japan will endorse stimulative monetary policy, but probably holding rates.
The surge in US Bond Yields failed to boost the mighty Dollar, as risk off sentiment jumped, allowing the EUR to trade 1.1070 despite the ECB actions. The GBP has rallied strongly, trading up towards 1.2500, buffeted by Brexit developments. Commodity currencies have been severely impacted by the US/China trade war and positive developments has allowed some recovery of recent losses. The NZD had recovered to 0.6450, but poor economic data and political turmoil, has seen the currency crash to 0.6370, while the AUD pushes back towards 0.6900! The NZD is swimming against the tide and looks to be in serious trouble.
Weekly Market Calendar
16/9 NZ Services PMI, UK House Prices, NZ Dairy Auction, China Industrial Production, China Retail Sales, Empire State Manufacturing
17/9 NZ Consumer Confidence, Australia Consumer Confidence, China New House Prices, Australia House Prices, RBA Minutes, German/EU ZEW Economic Sentiment, Industrial/Manufacturing Production, NAHB House Price Index
18/9 NZ Current Account, NZ GDP ratio, Japan Trade Exports/Imports, UK CPI, EU Construction, EU CPI, US Building Permits, US Housing Starts, FOMC Rate Decision
19/9 NZ GDP, Bank of Japan Rate Decision, Australia Employment, EU Current Account, UK Retail Sales, Bank of England Rate Decision, US Current Account, US Leading Index, US Existing Home Sales
20/9 Japan CPI, NZ Credit Card Spending, EU Consumer Confidence