Daily Market Commentary 10th April 2024

Markets were nervous ahead of the key US CPI inflation number, due out tonight. Inflation in the US is expected to spike back upwards, sending jitters through markets, which expect the Fed to cut rates. Fed Member Kashkari spoke overnight, and suggested rate cuts would not come, until inflation is completely tamed. The projected rate cuts expected this year, may be deferred, as US economic data has been stronger than expected extending the Central Bank’s latitude. The Fed will more likely act later in the year, as political pressure builds into the looming Federal election. Markets also await the release of the ‘Fed Minutes’ and rate decisions from the RBNZ. Bank of Canada and the ECB. The EUR traded 1.0850, while the GBP moved above 1.2650, ahead of key GDP data later in the week.

Commodity currencies continued to prosper the softer reserve, with the AUD trading above 0.6600, while the NZD inches up to 0.6050 ahead of the RBNZ meeting and rate decision. NZ Business Confidence plummeted back into the doldrums, after a recent resurgence, but elevated interest rates do not help.