Collinsonfx Daily Market Commentary

US markets continued to surge in to further record territories, supported by the surge in global sentiment, resulting from the 'Phase One' trade agreement between the US and China. President Trump signed the agreement which allows the US to increase exports to China by $200 Billion over two years. The other key components of the agreement is addressing IP transfers, financial services de-regulation in China and currency manipulation. The Fed released an important measure of the US economy, in the 'Biege Book', which confirmed modest economic progress and did not indicate any changes in monetary policy. US Retail Sales increased by 0.3%, in line with estimates, while the Philly Fed Survey showed large improvements.

The EUR was steady, trading around 1.1130, while the GBP jumped to 1.3070, as Brexit fast approaches. German CPI was steady, holding at 1.5%, hinting at slightly better growth numbers, coming down the pipelne. The US/China trade agreement was a boost to the trade exposed commodity currencies, with the NZD pushing up to 0.6630, while the AUD posted initial gains but suffered in overnight trade. The AUD fell back below 0.6900, as markets consider the impact of the 'bush fires' on the economy and the prospects of further interest rate cuts from the RBA, to compensate.

Markets look set to ride the wave of positive sentiment, triggered by the fall-out from 'Phase One' US/China trade agreement, to close out the week.