Daily Market Commentary 10th July 2023

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Markets closed lower Friday, despite an advantageous Non-Farm Payrolls number. Non-Farm Payrolls come in at 209,000 jobs added, lower than expectations and much lower than the ADP Private Sector report (497,000). The number was a relief to markets and equities turned positive following the release, but upon digestion and consideration, markets tanked into the close. US Bond Yields jumped even higher, with the 10-year consolidating above 4%. Market expectations are for further rate rises to come, and tough economic conditions to prevail, until pressures in US labour markets ease. Despite the rising yields the US Dollar was softer, allowing the EUR to leap above 1.0950, while the GBP cruised above 1.2800.

The softer reserve allowed the commodity currencies to recover ground, with the NZD heading back to 0.6200, while the AUD looks to regain 0.6700. The coming week will focus on inflation, across Europe and in the United States. Inflation levels are expected to continue to dramatically fall and any signs of static, or rises, will be met with sharp market adjustments. The RBNZ and the Bank of Canada, both meet for a revision of their respective monetary policies, with the RBNZ expected to hit the ‘pause button’, while BoC is expected to raise by 25 basis points. Inflation, interest rates and recessionary pressures are the focus of current markets, with a slew of economic data due to be released this coming week.

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