Daily Market Commentary
Markets closed out a strong week, with confidence surging, on the back of Western Central Bank rate cuts. Recession in Europe has solved the inflation problem, supposedly, with French and Spanish inflation CPI indicators plummeting. The lack of spending and consumer depression has killed the inflation indicators. High energy prices continue and these flow through the entire economy. European Government debt has reached untenable levels and the mere servicing of said debt, becomes crippling. This may be much of the reason for Western Central Banks urgency, to cut interest rates. US PCE inflation was higher, as expected, reflecting the problem that remains. The Fed is trying to avoid the inevitable recession, at least until after the election. The US Dollar rallied, with the EUR drifting back to 1.1170, while the GBP fell below 1.3400.
Commodity currencies have had a strong week, with the AUD looking to regain 0.6900, while the NZD consolidates above 0.6300. The pressure is off inflation, for Central Banks, now their attention turns to growth. The Fed will be watching this-coming-weeks labour market reports closely. The tell-tale signs are there for all to see. Interest rate differentials remain important for currency direction, but any sign of recession in the US, will kill commodity demand and impact the associated currencies.
Weekly Market Commentary
30/9 Japan Industrial Production, NZ Business Confidence, China Services/Manufacturing/Composite PMI, German Retail Sales, UK GDP, Italy/German CPI, Dallas Fed Manufacturing Index. NZ Building Permits, Australia Manufacturing PMI, Japan Employment/Tankan Report
1/10 Australia Building Permits/Retail Sales, UK/France/German/EU Manufacturing PMI, EU CPI, US Manufacturing PMI, ISM Manufacturing PMI, Jolts Jobs Report, NZ Dairy Prices, Australia Manufacturing PMI
2/10 France Budget, EU Employment, US Weekly Mortgage Applications, ADP Jobs Report, Australia Services/Composite PMI
3/10 Australia Trade Exports/Imports, Japan Services PMI, NZ Commodity Prices, UK/France/German/EU Services/Composite PMI, Challenger Jobs Report, US Weekly Jobless Claims, US Services/Composite PMI, US Factory Orders, ISM Services PMI
4/10 EU PPI, US Non-Farm Payrolls, US Employment
Paul Bettany I Collinson Forex Limited Collinson & Co.
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