Collinson Forex Daily Market Commentary and Weekly Market Calendar 7 October 2024

Daily Market Commentary Monday 7th October 2024

Non-Farm Payrolls beat forecasts last Friday, boosting equity markets, but flashing warning signs from the bond market. US Bond Yields are on the rise again, despite the Fed's 50 basis point rate cut at their last meeting. The strong report from the labour market was enough to convince market analysts that the Fed will be reluctant and less aggressive on future rate cuts. The convenience of the surprise 50-point rate cuts, weeks before the Presidential Election, plants a seed of doubt about the Fed's conviction on lower rates. The rise in bond yields supported the recent rally in the US Dollar, with the EUR falling to 1.0950, while the GBP crashed below 1.3100.
 
The rising reserve punished commodity currencies, with the NZD plummeting to 0.6150, while the AUD has slipped below 0.6800. This coming week will focus closely on inflation, fuelling speculation of Western Central Banks and their future monetary policy. The RBNZ will meet next week, and look set to cut interest rates further, perhaps by as much as 50-basis points. The clown RBNZ Governor was more focused on woke DEI policy, missing the moves on markets and the collapse of inflation. He now seeks to restore some semblance of credibility, by ramping up rate cuts, after taking his eye off the economy and the inflation ball. The upshot should be downward pressure on the currency so hedging may be considered.

Weekly Market Calendar

7/10 Australian Inflation Gauge, German Factory Orders, UK House Prices, EU Retail Sales, Japan Current Account/Trade
 
8/10 Australia Job Ads, Australia Business Confidence, German Industrial Production, EU Current Account Exports/Imports, NFIB Small Business Optimism, Canada Trade Exports/Imports, US Trade Exports/Imports, Australia Consumer Confidence
 
9/10 RBNZ Rate Decision, German Trade Exports/Imports, US Weekly Mortgage Applications, FOMC Minutes, UK House Prices, Japan PPI
 
10/10 ECB Minutes, US CPI, US Weekly Jobless Claims, Bank of England Hearings, NZ Business PMI
 
11/10 German CPI, UK Trade Exports/Imports/GDP, UK Industrial/Manufacturing Production, US PPI, German Current Account, University of Michigan Economic Sentiment