Daily Market Commentary
The Chinese Lunar New Year ensures quiet trading across Asian markets but not in Europe and the USA. The S&P broke through the psychological 5,000 mark, at the close of Friday's market trading, as equities thrive and inflation tumbles lower. German inflation also tumbled lower, to 2.9%, from 3.7%. The German inflation is collapsing due to deep recessionary conditions and the de-industrialisation of German economy. Much of Europe is also suffering economic recession, this being the unwanted antidote to inflation, but at the cost of much pain. The coming week will be quiet across Asian markets, due to lunar New Year celebrations, while Europe and the US will be focused on economic growth and inflation. The softer US Dollar allowed the EUR to close out the week trading just below 1.0800, while the GBP consolidated gains above 1.2600.
The softer reserve allowed commodity currencies to regain some lost ground, with the NZD approaching 0.6150, while the AUD attempts to hold above 0.6500. Central Bank commentary in Australia has been confusing, with the Head of the RBA warning of both rate cuts and rises, neither Arthur nor Martha. Fears of inflation remain but there is growing pressure to cut rates and stimulate recessionary economic conditions, on both sides of the Tasman. Look for inflation readings in Europe and the US, while growth and trade data will also come under close scrutiny.
Weekly Market Calendar
12/2 EU Economic Forecasts, India CPI, Industrial/Manufacturing Production, Denmark CPI, Portugal CPI
13/2 Australia Consumer Confidence, Japan PPI, Australian Business Confidence, NZ Business Inflation, France Employment, UK Employment, German/EU ZEW Economic Sentiment, NFIB Small Business Optimism, US CPI, German Current Account
14/2 NZ Credit Card Spending, UK CPI/PPI, EU GDP/Industrial Production/Employment, US Weekly Mortgage Applications, US PPI
15/2 Russia CPI/GDP, UK GDP, Australian Employment, Japan Industrial Production, UK GDP/Industrial Production/Manufacturing Production, EU Trade Exports/Imports, US Retail Sales, US Weekly Jobless Claims, Philly Fed Report, Empire State Manufacturing Index
16/2 US Industrial/Manufacturing Production, NAHB Housing Market Index, NZ Business PMI, UK Retail Sales, France CPI, US Housing Starts/Building Permits, University of Michigan Economic Sentiment
PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO
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