Daily Market Commentary
Markets reopened in the US, following a Labour Day long weekend, and sentiment tanked. US equities crashed, as at the opening of the September trading month, triggered by reemerging fears over the state of the US economy. PMI Manufacturing data in the US remains weak, as does European Manufacturing, which is leading to fears of recessionary conditions prevailing. This week markets will be focused on US Labour Market reports, including Jolts, ADP, Challenger and the finale, the all-important Non-Farm Payrolls, released Friday. These are expected to be weak, following the massive reviews lower, from the last year of data. The US Dollar crept higher, with the EUR slipping back to 1.1030, while the GBP dropped below 1.3100.
The was disturbing numbers coming from Australia, concerning their Q2 Current Account deficit, which blew out to a deficit of more than AUD$10Billion. The deterioration of the prices received for commodities, over the quarter, has torn the deficit and this ahead of today's important GDP growth data. This is expected to be weak. NZ Terms of Trade actually improved, as export prices rose at a faster rate than did imports. This could explain partly, the relative performance of the currency, despite the RBNZ cutting rates. The rising reserve punished the AUD, which crashed to 0.6700, while the NZD slid back below 0.6200.
Paul Bettany I Collinson Forex Limited Collinson & Co.
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