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Daily Market Commentary
Markets closed out the last week on a positive note, the inflation crises appearing to be over in Europe and the US, allowing Central Banks to cut rates. The ECB cut rates for the third time in this loosening cycle, as CPI inflation fell to 1.7% in the EU. The Chinese GDP growth number was better than expected, coming in at 4.6%, while Chinese Retail Sales and Industrial Production blew through expectations. The Chinese announced stimulus in the form of monetary policy and a bail-out for the under pressure Real Estate sector. Markets are calling a soft-landing in the US economy, but the real focus is the Presidential Elections, with the 'Trump Effect' being entertained. Markets remain extremely bullish for a Trump win and the flow on economic benefits. Currencies remain settled and subdued, with the EUR trading around 1.0850, while the GBP pushed back to 1.3050.
Commodity currencies are attempting to stabilise from recent losses, with the AUD trading around 0.6700, while the NZD looks to consolidate above 0.6000. The extremely dovish monetary policy, recently adopted by the RBNZ, has cut the legs out from under the KIWI. Inflation has collapsed in NZ, due to the recessionary economy and now the Reserve Bank attempts to revive things, with the sudden slam into reverse gear. This coming week will focus on Central Bank interest rate decisions from the Peoples Bank of China and the Bank of Canada. A week-long meeting of the IMF will be a particular focus and may impact market direction. Geo-Political factors from the Middle East and the US loom as possible Black Swans.
Weekly Market Commentary
21/10 IMF Meeting, PBoC IRD, NZ Credit Card Spending, German PPI, NZ Trade Exports/Imports
22/10 Richmond Fed Manufacturing Index, IMF Meeting
23/10 IMF Meeting, US Weekly Mortgage Applications, Bank of Canada IRD, EU Consumer Confidence, US Existing Home Sales, Fed's Beige Book, Australia Services/Manufacturing/Composite PMI
24/10 IMF Meeting, Japan Services/Manufacturing/Composite PMI, RBA Annual Report, France Business/Consumer Confidence, UK/France/German/EU Services/Manufacturing/ Composite PMI, Chicago Fed National Activity Index, US Weekly Jobless Claims, Bank of England Parliamentary Hearings, US New Home Sales, Kansas City Fed Manufacturing Index, NZ Consumer Confidence, UK Consumer Confidence, Tokyo CPI,
25/10 IMF Meeting, IFO Business Climate, US Durable Goods Orders, University of Michigan Economic Sentiment
Paul Bettany I Collinson Forex Limited Collinson & Co.
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