Daily Market Commentary
Markets closed out the week gone by down, with equities retreating from record highs, due to the spike up in US inflation. US CPI and PPI were both showing reversal in the downward trends, which will become a serious problem, if the reversal is repeated in the coming months. This will influence Central banks, with a plethora of interest rate decisions coming in the week ahead. The Bank of Japan and the RBA will lead out on Tuesday, with the BOJ expected to reverse long held monetary policy and move away from negative interest rates. Later in the week will be the turn of the Federal Reserve and the Bank of England, who are both expected to hold rates, but the narrative will be extremely important, to market direction. Inflation readings from Europe and the UK will impact the Central Banks tone, if not actual interest rates. Inflation has shown signs of resurrection, in both Europe and the US, which has led to higher bond yields, while the US Dollar has regained some lost ground. The EUR will open trade this coming week below 1.0900, while the GBP looks to hold above 1.2700.
The rejuvenated reserve hit the commodity currencies, with the NZD crashing below 0.6100, while the AUD has fallen to 0.6550. Inflation and Central Bank interest rate decisions and commentary will dominate the economic landscape in the week to come. Locally NZ GDP readings could confirm a 'technical recession', or by some miracle of minor data manipulation, narrowly avoid the indignance.
Weekly Market Calendar
18/3 NZ Services PSI/NZ Composite PCI, Japan Machine Orders, Australia Consumer Inflation, China Industrial Production/Retail Sales/Employment, EU CPI, Canada PPI
19/3 NAHB House Market Index, Bank of Japan IRD, RBA IRD, Japan Industrial Production, German/EU ZEW Economic Sentiment, Canada CPI, US Building Approvals/Housing Starts
20/3 NZ Dairy Prices, NZ Current Account Q4, France Consumer Confidence, German PPI, UK CPI, Poland IRD, Italy Industrial Production, German Consumer Confidence, US Weekly Mortgage Applications
21/3 Fed IRD, NZ GDP, Australia/Japan Services/Manufacturing/Composite flash PMI, UK/France/Germany/EU Services/Manufacturing/Composite flash PMI, Japan Trade, Japan Tankan Report, Australia Employment, Bank of England IRD, US Weekly Jobless Claims, Philly Fed Manufacturing Index, US Services/Manufacturing/Composite flash PMI
22/3 US Existing Home Sales, NZ Trade Exports/Imports, Japan CPI, UK Consumer Confidence, UK Retail Sales, German Ifo Business Climate, Russia Central Bank IRD
PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO
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