Daily Market Commentary
Equity markets closed out yet another strong week of gains, especially European bourses, which broke into record territory. The fuel for the rally was the speculation that the ECB and Bank of England will follow the Swedish Riksbank and cut rates sooner rather than later. Confirmation will come and reinforcement for the argument will come in the form of inflation data, which will be released in the coming week. The UK emerged out of the 2023 recession, with a better than expected GDP (0.6%) number for Q1. The only negative to the rally was that bond yields are creeping back up in both the US and Europe. The EUR settled above 1.0750, while the GBP consolidated above 1.2500, following the stronger than expected GDP growth data.
The settled reserve allowed the NZD to regain 0.6000, while the AUD attempt to push above 0.6600. Australian Employment data will be released in the coming week and the RBA will be looking for a softer number, to contain inflationary fears. The Commodity currencies will be determined by the European and US inflation and growth data.
Weekly Market Calendar
13/5 NZ Services PSI, NZ Composite PCI, EU Meeting, Australia Business Confidence, China Current Account, European Commission Forecasts, German Current Account
14/5 NZ Credit Card Spending, Japan PPI, German CPI, UK Employment, German/EU ZEW Economic Sentiment, NFIB Small Business Optimism, US PPI
15/5 France CPI, Holland GDP, Poland GDP/CPI, EU GDP, US CPI, US Retail Sales
16/5 NAHB House Market Index, Russia GDP, France GDP, Australia Employment, Japan PPI, Italy CPI, US Building Permits/Housing Starts, Philly Fed Manufacturing Index,
17/5 NZ PPI, China Industrial Production/Retail Sales/Employment, France Employment, EU CPI, Russia CPI