| Daily Market Commentary Markets finished the week on a positive note, reinvigorated by the developments on the US/China trade front, allowing global growth prospects to improve. Chinese negotiators have been in communication with their US counterparts and finally look prepared to do a deal. Negotiations are set for early October and a result looks as though it may be likely. This allowed confidence to surge in markets and this has supported a spike in both equity and bond markets. US Non Farm Payrolls added 130,000, slightly missing expectations, but Unemployment held steady at 3.7%. The strong US economy has been reflected in the tight labour market, which has driven up participation rates and wages.
The UK and Europe are in a state of chaos with the slow motion train crash, that is Brexit, rolling on. The Conservative Government, lead by Boris Johnson, has now lost control of the Parliament. The Parliament has a majority of 'remainers' sprinkled across all parties, while the Brexiteers are a minority and have lost control. The people voted to leave the EU and remain a majority of the electorate, but the Parliament no longer represents the people and will not allow a democratic election to resolve the issue. The chaos is a sad reflection of the rupture between the electorate and the ruling elite, that is being experienced across Western democracies.
Markets have shrugged off the political disarray and surged on the positive sentiment emanating from developments on the US/China trade talks. Risk appetite rose and allowed the Dollar to retreat. The EUR rebounded to 1.1030, while the GBP traded around 1.2300, despite the political disruption. The trade exposed commodity currencies have been beneficiaries of both the sliding reserve and the positive risk sentiment, with the AUD trading 0.6840, while the NZD broke above 0.6400.
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