Collinson Weekly Market Commentary and Calendar

Monday, August 21, 2023


Weekly Market Commentary

Equity markets closed out a yet another negative week, which saw global bond yields surge and ratings agencies starting to make an impact. Friday saw EU inflation soften slightly, but core inflation remains stubbornly high, while the same happened with Japanese inflation numbers. Inflation and Central Bank monetary policy will come into sharp focus in the coming week, with the leaders of Central Banks gathering in Wyoming, USA for the 'Jackson Hole Symposium'. This will be capped off with an address from the ECB Chair LeGarde and  Fed Chairman Powell, on Friday. BRICS summit also meets in South Africa, with the potential to cause some degree of market disruption. BRICS is likely to expand their membership and prospects, while the possible market mover, will be the development of a possible future rival for the US Dollars reserve status. BRICS may well announce the progress of an alternative 'settlement currency' with some commodity backing. This has enormous potential to upset global currency markets, in the medium term. The EUR closed the week, trading around 1.0850, while the GBP consolidates above 1.2700.

Commodity currencies are suffering rising reserve currency strength, while battling flagging demand pressures for said commodities. The AUD has tumbled all the way down to 0.6400, while the NZD has settled above 0.5900, nonchalantly dismissing the BIG figure of 0.6000. This coming week will be focused on the Jackson Hole Symposium and the BRICS Summit. These events both have potential to seriously move markets.

Weekly Market Commentary

21/8 NZ Trade Exports/Imports, NZ Credit Card Spending, German PPI
 
22/8 BRICS Summit, EU Current Account
 
23/8 BRICS Summit, US Existing Home Sales, Richmond Fed Manufacturing Index, NZ Retail Sales, Australia/Japan Services/Manufacturing/Composite flash PMI, UK/France/German/EU Services/Manufacturing/Composite flash PMI, US Weekly Mortgage Applications, US Building Permits, US Services/Manufacturing/Composite flash PMI
 
24/8 BRICS Summit, EU Consumer Confidence, US New Home Sales, Jackson Hole Symposium, US Durable Goods Orders, Chicago Fed National Activity Index, US Weekly Jobless Claims
 
25/8 Kansas City Fed Manufacturing Index, UK Consumer Confidence, Japan/Tokyo CPI, Jackson Hole Symposium Address by LeGarde and Powell, German GDP, France Consumer Confidence, German Ifo Business Confidence, 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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