Collinson Weekly Market Commentary and Calendar

Monday, April 3, 2023


Weekly Market Commentary

Markets closed out Q1 on a high, brushing aside the looming banking crises and surging equities. The measures employed by the Federal Reserve and the ECB seem to have worked, for now, but toxic balance sheets and liquidity issues remain. Markets appeared to have focused on the positives to close out Q1, with the 'peak inflation' train, leaving the station. The key and preferred inflation measure of the Fed, the PCE, dipped slightly but core inflation remains stubbornly high. EU inflation also fell below 7%, from 8.5%, due to heavily subsidised energy prices. French and Austrian inflation also fell from peaks, so everything appears to be moving in the right direction. The University of Michigan Economic Sentiment report was negative, for the first time in four months and the threat of recession is on the horizon.

Markets will focus on US employment data, in the coming week, culminating in the Non-Farm Payroll number out this coming Friday. The tight labour market needs to turnaround before the Fed will even consider halting their aggressive war on inflation. The EUR will begin the week trading above 1.0800, while the GBP is drifting back towards 1.2300. Global PMI data will also be a strong point of market interest, in the coming week.

Commodity currencies are at the whim of the reserve, with the AUD slipping back towards 0.6650, while the NZD attempts to hold above 0.6200. Both the RBA and RBNZ are meeting this coming week, to announce their latest monetary policy decisions. The RBA and the RBNZ are both expected to follow the Fed and raise rates by 25 basis points, but the narrative will be watched extremely closely, as they may hint at a pause in rate rises in the near future?

Weekly Market Calendar

3/4 Australia Manufacturing PMI, TANKAN Report, Japan Manufacturing PMI, Australia Building Permits/Retail Sales, China Manufacturing PMI, Australia Commodity Prices, UK/France/German/EU Manufacturing PMI, German New Car Registrations, Canada/US Manufacturing PMI
 
4/4 ISM Manufacturing, NZ Business Confidence, RBA Rate Decision, German Trade Exports/Imports, EU PPI
 
5/4 US Factory Orders, Jolts Jobs Report, NZ Dairy Prices, Australia/Japan Services/Composite PMI, RBNZ Rate Decision, German Factory Orders, France Industrial Production, UK/France/German/EU Services/Composite PMI, US Weekly Mortgage Applications, ADP Jobs Report, US Trade Exports/Imports, US Services/Composite PMI
 
6/4 ISM Non-Manufacturing PMI, Australia Trade Exports/Imports, China Services/Composite PMI, German Industrial Production, UK House Prices, Challenger Jobs Report, US Weekly Jobless Claims
 
7/4 US Total Vehicle Sales, France Trade Exports/Imports, Non-Farm Payrolls, US Employment

PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO

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