Daily Market Commentary 10th September 2020

Equity markets came roaring back from big losses suffered in the previous sessions. Global share markets have been under severe selling pressure, lead by Tech shares, but was it profit taking or a serious correction in the ‘V-shaped’ recovery? It appears that this may well be profit taking on severely overbought and inflated ‘tech’ stocks, although tine will tell? The fast approaching US Presidential election will continue to be a major influence on markets until the election result is in!

The Dollar drifted overnight, with the EUR trading back to 1.1800, although the GBP slipped below 1.3000. The GBP has been under extreme selling pressures as ‘Brexit’ negotiations look to have collapsed. The ‘no deal’ Brexit looks increasingly likely, under WTO rules, which will give some certainty. The spike in virus cases across Europe has drawn remedial actions from Governments across Europe, although they have realised a complete lockdown would be economic suicide. The second wave has a high infection rate but a much lower mortality rate.

Commodity currencies were beneficiaries of resurgent market confidence, with the AUD rebounding to 0.7270, while the NZD jumped to 0.6670. Australian Consumer Confidence jumped, while NZ Manufacturing contracted, 12.1%. Global share market volatility remains a daily influence on currencies but macro Geo-Political issues are driving the overall narrative.