Collinson Forex Daily Market Commentary

Daily Market Commentary

Markets digested the political fallout of the French and British elections and did not like the flavour. Markets thrive on certainty and the French conspired and manipulated result, is not what they are looking for. European equity markets plummeted. The French Parliamentary results means that no major party have a majority and it is hard to see a coalition to Govern. A technocratic Government is an option, but chaos and uncertainty appears the more likely outcome. The UK elections have resulted in certainty with a landslide minority victory for Labour. The plan appears to be housing, which is exactly the same plan as the 'Adern and Albanese' led labour Governments in the antipodies, in recent times. The results are likely to be similar. The US markets were steady, with a focus on testimony from the Federal Reserve Chairman, appearing in front of the US Senate. Chairman Powell spoke of the need to cut interest rates in order to ensure economic growth. The softer labour market will encourage this move, but the Fed has been extremely reluctant to join the ECB, cutting interest rate. The EUR barely holds 1.0800, while the GBP dipped back below 1.2800.

Australian Business Confidence was positive but consumer confidence remains weak. The AUD held above 0.6700, while the NZD clung grimly on to 0.6100, ahead of the key RBNZ interest rate decision. Inflation data from the US will be a week-long focus of markets.

Paul Bettany   I   Collinson Forex Limited    Collinson & Co.  

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