Daily Market Commentary
Markets stabilised overnight, with the news that more than 70 Countries have approached the US, with a view to resolving the trade war. Countries are offering to balance the trade deficits with the US, but more importantly, fixing the cause of the trade imbalance. Asian Countries, such as Japan and Vietnam, are offering a balance, plus removal of their own tariffs and import restrictions. This was reflected in the performance of their equity markets, with a surge in stock markets, although China remained flat. China levied retaliatory tariffs on the US, but Trump threatened even more draconian tariffs in response, forcing China into negotiations. EU markets rallied strongly, with offers from the EU to cut tariffs, but this may well be a 'dead-cat bounce'. The EU continue with the fighting talk and operate from a very weak negotiating position. The US Dollar was stable, with the EUR trading 1.0940, while the GBP rallied to 1.2780.
Commodity currencies remain under pressure, with the AUD trading below 0.6000, while the NZD holds around 0.5550. The NZD will be under the spotlight today, with the latest RBNZ rate decision (IRD), with projections of further cuts. The RBNZ is likely to cite the global trade war as a threat and promise further monetary stimulus. Trade and tariff agreements remain the key to market performance.
Dates & Headline
7/4 Australia Job Ads, German Industrial Production, German Trade Exports/Imports, UK House Prices, EU Retail Sales
8/4 NZ Business Confidence, Japan Current Account, Australia Business Confidence, France Current Account, France Trade Exports/Imports, NFIB Small Business Optimism
9/4 RBNZ IRD, Japan Consumer Confidence, US Weekly Mortgage Applications, FOMC Minutes, Japan PPI
10/4 China CPI, US Weekly Jobless Claims
11/4 NZ Business PMI, German CPI, UK Trade, UK GDP, UK Industrial/Manufacturing Production, German Current Account, US PPI, University of Michigan Economic Sentiment
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