Collinson Weekly Market Commentary and Calendar

Weekly Market Commentary

The ECB raised rates 25 basis points, in line with expectations, while markets cast aside Fed threats to raise rates further, into the future. US markets put inflation in the rear-view mirror and rallied strongly on equity markets, while US Bond Yields and the Dollar settled lower. French inflation drifted lower and some very weak trade numbers out of the EU, confirmed the recession in the European economy, The ECB decided to increase rates nonetheless, to put a final nail in the inflation coffin. Economic conditions are not good, but the EU trade number was a shock, with a deficit of EUR$11.7 Billion. The projections were for a more than EUR$21 Billion surplus. The US is also suffering depressed economic conditions, but the Fed's 'pause' was enough to trigger a rally, on equity markets. The EUR jumped to 1.0940, on the news, while the GBP rallied strongly towards 1.2800.
 
The softer reserve allowed the AUD to trend back towards 0.6900, while the NZD broke above 0.6200 despite weak GDP numbers. NZ GDP contracted 0.1% for Q1, as expected, following Q4(2022) revision lower to minus 0.7%. This confirms the technical recession in NZ, which most will certainly not deny as a reality, although it is historical. IMF had serious warnings for the NZ Government and their financial management, as deficit/debt spending spirals and massive trade deficits warn NZ, that it is living way beyond their means. Australian Unemployment numbers continue to tighten, with the headline rate falling to 3.6%, which is not what the RBA is looking for, and suggests further tightening in monetary policy.
 
Weekly Market Calendar

12/6 NZ Credit Card Spending, Japan PPI, Denmark/Czech CPI
 
13/6 US Budget, Australia Consumer/Business Confidence, German CPI, UK Employment, Spain CPI, German/EU ZEW Economic Sentiment, NFIB Small Business Optimism,
US CPI, German Current Account
 
14/6 NZ Current Account, German Wholesale Prices, UK GDP/Trade, UK Industrial/Manufacturing Production, EU Industrial Production, US Weekly Mortgage Applications, US PPI
 
15/6 FOMC Meeting, NZ GDP, Japan Trade Exports/Imports, EU Meeting, China House Price Index, China Industrial Production/Retail Sales/Employment, France CPI, EU Trade, ECB Rate Decision, US Retail Sales, US Weekly Jobless Claims, Philly Fed Manufacturing, Empire State Manufacturing, US Manufacturing/Industrial Production
 
16/6 NZ Business PMI, Bank of Japan Rate Decision, EU Finance Ministers Meeting, Italy CPI, EU CPI, University of Michigan Economic Sentiment

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

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