Markets turned negative to begin a week that will look at growth and inflation, across global markets. The US Non Farm Payrolls missed expectations, although the headline Unemployment rate fell to 5.8%, due to lower participation. This week will focus on growth and inflation. The only thing that can impact the Central bank QE infinity monetary policy, is inflation. The Fed continues to insist any inflation is transitory, but inflation is not an affliction worth acquiring, as it has historically been very hard to combat and usually results in higher interest rates and recession.
The G7 Nations agreed to a global corporate tax rate of 15%, with compliance rules, but imposition will be extremely complicated and difficult. The EUR approaches 1.2200, while the GBP traded 1.4180, awaiting market moving data releases. The Chinese announced massive increases in Exports and Imports, as trade expands at a gallop, but still not meeting market expectations. It was enough to boost commodity demand and the NZD jumped to 0.7225, while the AUD pushed above 0.7750.
Markets will look closely at inflation and growth, while the NZ domestic market, will watch the RBNZ. Rates are not going to change but the Central bank have shown a clear path for rate rises into the future. The economic evaluation will be interesting, with their assessment of inflation and the permanent nature of it?