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Daily Market Commentary
Markets consolidated Friday, just off record highs, following almost two weeks of gains. The improved market sentiment is derived from the confidence in Central Bank interest rate cuts, following soft inflation data in both the US and Europe. The ECB is expected to cut rates as soon as this month, perhaps, and the Fed is expected to begin easing rates in Q3. This has boosted market sentiment and seen bond yields and the US Dollar tumble. The EUR has zoomed up to 1.0850, while the GBP has jumped to 1.2700. The coming week will be dominated with growth and inflation numbers, while the Fed release the latest minutes, from their last meeting. PMI data from Asia, Europe and the US will provide interest to market participants.
The softer reserve has allowed the recovery in commodity currencies to continue. The AUD is fast approaching 0.6700, while the NZD consolidates above 0.6100, ahead of the RBNZ latest rate decision this coming week. The RBNZ is likely to leave rates at elevated levels, to combat persistent inflation in the local economy, while accompanying commentary will be important.
Weekly Market Calendar
20/5 Spain Trade, China 1/5 Year Prime Rate, Czech PPI
21/5 Australia Consumer Confidence, RBA Minutes, NZ Credit Card Spending, German PPI, EU Current Account, EU Trade, Canada CPI
22/5 NZ Dairy Prices, Tankan Report, Japan Trade Exports/Imports, RBNZ Rate Decision, UK CPI/PPI, ECB Non-Monetary Policy Meeting, Weekly Mortgage Applications
23/5 US Existing Home Sales, Russia PPI, FOMC Minutes, Australia/Japan Services/Manufacturing/Composite flash PMI, UK/France/Germany/EU Services/Manufacturing/Composite flash PMI, German Consumer Confidence, US Building Permits, Chicago Fed National Activity Index, US Weekly Jobless Claims, US Services/Manufacturing/Composite flash PMI
24/5 EU Consumer Confidence, US New Home Sales, Kansas City Fed Manufacturing Index, NZ Consumer Confidence, NZ Trade Exports/Imports, UK Consumer Confidence, Japan CPI, German GDP, France Retail Sales, US Durable Goods Orders, German Business Confidence, 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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