Weekly Marketing Commentary
US equity markets finished a strong week, with the biggest gains since November 2018, driven by Central Banks. The latest Non Farm Payroll number disappointed, weaker than expected, thus raising the prospect of a Fed rate cut. We are moving into the Obama style paradoxical market, where 'bad economic news' is 'good economic news'. The poor economic data is driving Central Banks to cut rates and introduce 'QE' policies, driving equity markets, with cheap money. This has undermined the US Dollar, with the EUR rising to 1.1330, while the GBP moved up to 1.2730.
Positive rhetoric surrounding the Mexico/US trade and immigration negotiations, have also allowed positive sentiment to respond. President Xi is in Russia consolidating their relationship and commented that he remains a strong friend of President Trump. The Trade wars continue and seem to be expanding, but markets are becoming used to this and still booking gains. The reserve continued to weaken and the commodity currencies were the beneficiaries, with the NZD besting 0.6650, while the AUD regained 0.7000.
Central banks are now stepping in to combat the effect of global trade wars on economic growth. This will continue to benefit equity markets, for the wrong reasons, but the problem remains. Attention will start to focus on the G20 meeting, at the end of June in Japan, as it will become the target for any possible trade deal?
Weekly Market Calendar
10/6 NZ Home Sales, Japan Current Account Trade Exports/Imports GDP, China Trade Exports/Imports, UK GDP, UK Trade Exports/Imports
11/6 NZ Manufacturing, Australia Business Confidence, UK Employment, NFIB Small Business Optimism
12/6 NZ Migration, NZ Credit Card Spending, Australia Consumer Confidence, China CPI, US Weekly Mortgage Applications, US CPI
13/5 Australia Employment, German CPI, EU industrial Production, US Weekly Jobless Claims
14/6 NZ manufacturing PMI, NZ Food Prices, China Industrial Production, China Retail Sales, Japan Industrial Production, US Retail Sales, US Manufacturing/Industrial Production, University of Michigan Sentiment
Thanks and Regards
Paul Bettany
Collinson & Co
0406-744-923