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Daily Market Commentary
US equity markets rebounded strongly to close out the week, boosted by a strong University of Michigan Economic Sentiment report and rising confidence. The S&P blew through record levels to close out a mixed week, with bond yields drifting off recent highs and the US Dollar easing. The EUR rallied, to trade up to 1.0900, while the GBP managed to regain 1.2700. This coming week will be dominated by Central Banks, with many announcing their latest interest rate levels and monetary policy. The Bank of Japan will kick things off on Tuesday, followed by the Bank of Canada, Norges Bank and the ECB later in the week. Markets will be focused on the narrative, as expectations are rates will remain unchanged, but recent spikes in inflation may impact the commentary. The Fed's favoured measure of inflation, the PCE, will be released Friday and this will be key to short term rates.
Commodity currencies were beneficiaries of the weaker reserve, with the AUD regaining 0.6600, while the NZD struggles to hold onto 0.6100. All eyes will remain focused on inflation and growth in the coming week, with a slow data-day Monday, likely to ensure a quiet start to the trading week.
Weekly Market Calendar
22/1 Hong Kong CPI, Poland Retail Sales/Industrial Production
23/1 NZ Services PSI, NZ Composite PCI, Australian Business Confidence, Bank of Japan Rate Decision
24/1 EU Consumer Confidence, Richmond Fed Manufacturing Index, NZ CPI, Australia/Japan Services/Manufacturing/Composite flash PMI, Japan Trade Exports/Imports, NZ Credit Card Spending, UK/France/German/EU flash Services/Manufacturing/Composite PMI, US Weekly Mortgage Applications
25/1 US Services/Manufacturing/Composite flash PMI, Bank of Canada Rate Decision, RBA Bulletin, France Business Confidence, German Ifo Business Climate, Norge Bank Rate Decision, SACB Rate Decision, US Building Permits, ECB Rate Decision, US Durable Goods Orders, US Weekly Jobless Claims, US GDP
26/1 US New Home Sales, Kansas City Fed Manufacturing Index, Tokyo CPI, Bank of Japan Minutes, France Consumer Confidence, German Consumer Confidence, France Consumer Confidence, US PCE Inflation, US Pending Home Sales
PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO
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