Daily Market Commentary
Equity markets posted a week of gains and bond yields came off recent record highs, despite serious economic and Geo-Political challenges. Non-Farm Payrolls came in hot and inflation readings from US CPI and PPI were higher than expected, which would normally lead to higher bond yields and lower equity markets, but no? The surge in equities was also confusing, considering the outbreak of war in Israel, which should cause uncertainty and lead to market disruption. Stock markets instead rallied, bond yields drifted lower and currencies were fairly stable. Inflation and war will impact the markets and this will only be a matter of time. This coming week will reveal a plethora of economic data releases from China, including GDP growth, Retail Sales, and Industrial Production. US Retail Sales will be a highlight, to measure the state of the consumer and inflation data from Europe will also be key. The USD did regain some ground, with the EUR slipping back o 1.0500, while the GBP fell back to 1.2140.
The rising reserve hit the commodity currencies at the end of the trading week, with the AUD falling below 0.6300, as the NZD crashed below 0.5900 ahead of the National Elections. The NZ Election will be held over the weekend and polls point to a change in Government. If this is so , then a Centre-Right Coalition Government would be a positive for markets. A confused result may result in unsettled markets. In Australia markets will be focused on the RBA, which releases the minutes from their latest meeting and their Annual Report.
UPDATE: It appears a right-wing Coalition Government will be formed in NZ. It may or may not include NZ First. All Blacks through to the Semi-Finals of the RWC.
Daily Market Calendar
16/10 NZ Services PSI, NZ Composite PCI, Japan Industrial Production, German Wholesale Prices, EU Trade, Empire State Manufacturing Index
17/10 NZ Inflation, ECOFIN Meeting, RBA Minutes, UK Employment, German/EU ZEW Economic Sentiment, Canada CPI, US Retail Sales/Industrial Production/Manufacturing Production
18/10 NAHB House Market Index, NZ Dair Prices, China GDP/Industrial Production/Retail sales/Employment, UK CPI/PPI, Australia CPI, EU CPI, US Weekly Mortgage Applications, US Building Permits/Housing Starts
19/10 Fed's Beige Book, Japan Trade Exports/Imports, Australia Employment, China House Prices, RBA Annual Report, France Business Confidence, EU Current Account, US Weekly Jobless Claims, Philly Fed Manufacturing Index
20/10 German Retail Sales, NZ Trade Exports/Imports, UK Consumer Confidence, Japan CPI, German PPI, UK Retail Sales
PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO
Paul Bettany I Collinson Forex Limited Collinson & Co. Private Banking
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