Weekly Market Commentary
The US/China Trade war fizzled, allowing markets to surge with renewed confidence, as reality dawns. The numbers always tell the story. China Exports more than $500 Billion annually to the USA, while Importing only $130 Billion, so who is going to win this trade war? The Chinese are smart, but Trump wrote the book, 'the Art of the Deal'! The Chinese are rapidly running out of imports to tax and the economy is tanking. The US economy is on fire, burning up.
This allowed risk-on sentiment to prevail. The Dollar receded, with trade exposed currencies, major beneficiaries. The AUD jumped to 0.7280, while the NZD surged to 0.6670, boosted by by strong local GDP data. The commodity, export currencies have been held hostage by the US/China trade war. Capitulation will happen and the question is not 'if' but 'when'?
The coming week is headlined by the FOMC, which will probably raise interest rates, endorsing the robust US economy. The RBNZ will also review monetary policy, but the question is now whether they will cut rates, or not? The strong GDP number, beat the RBNZ forecast, doubling their expectations. This may change perception within the Central Bank but the key Business Confidence number comes out Wednesday. Warning!
Weekly Market Calendar
24/9 Chicago Fed National Activity, Dallas Fed Manufacturing Activity
25/9 Australia Consumer Confidence, Bank of Japan Minutes, S&P Case Shiller Home Price Index, Richmond Fed National Activity, US Consumer Confidence
26/9 NZ Consumer Confidence, NZ Trade Exports/imports, NZ Business Confidence, US New Home Sales, US Weekly Mortgage Applications, FOMC
27/9 RBNZ Rate Decision, German Retail Sales, German Consumer Confidence, EU Business/Consumer Confidence, German CPI, US Trade Exports/Imports, US GDP, US Durable Goods Orders, Weekly Jobless claims, Pending Home Sales, UK Consumer Confidence, Japan CPI, Japan Industrial Production
28/9 German Employment, UK GDP, EU CPI, Chicago Purchasing Manager, University of Michigan Sentiment
Paul Bettany
Collinson & Co
0406-744-923