Collinson Weekly Market Commentary and Calendar

Weekly Market Commentary

The all-important Non-Farm Payroll number, released Friday, was overshadowed by a mini-banking crises, in the form of the closure of the Silicon Valley Bank. The bank itself is not so significant, as it services a lot of Tech start-ups, but is still the biggest US Bank to go under since the GFC. It may be the tip of the iceberg, as Central Bank liquidity tightens and digital currencies are launched? It was enough to spook markets, with equities and bond yields tumbling. This took the spot-light from the non-Farm Payroll number, which was again, better than expected. This ordinarily would have forced bond yields higher, but the fear of trouble in the Banking industry smashed bond yields, which may force the Fed to reconsider QT and raising rates so robustly? The USD dollar suffered the bond market correction, with the EUR rising to 1.0650, while the GBP regained 1.2000.

The flagging reserve allowed the NZD to hold above 0.6100, while the AUD floundered, below 0.6600. The coming week will be highlighted by inflation measures from both sides of the Atlantic, while local markets will focus on growth and employment. Australia releases their latest employment data on Thursday, while NZ releases Q4 GDP growth data. NZ Q4 growth data will be keenly analysed, as any slippage into negative territory, may only be magnified in the first quarter of 2023. The damaging weather events in NZ, may negatively impact inflation and growth, in Q1, 2023.