Daily Market Commentary 11th August 2023

US inflation was softer than expected, coming in at 3.2%, but core inflation remains stubbornly high, and inflation did rise from 3%. Inflation is going in the wrong direction and remains well above target levels. The data will not have the impact that it ordinarily does, as the Fed does not meet in August, so attention will turn to inflationary pressures closer to the scheduled September meeting. Market focus will turn to growth employment and deficit/debt spending. The US Dollar was relatively steady, with the EUR pushing back towards 1.1000, while the GBP dipped below 1.2700.

Japanese PPI was higher than expected, but still heading lower, in the right direction. This did not assist the Yen, which is feeling inflationary pressures and fell back to 144.70. The steady reserve allowed the AUD hold above 0.6500, while the NZD headed back towards the ‘Big Figure’ of 0.6000. NZ Business PMI and Food inflation may impact local markets, but attention will turn to UK Growth data and US Economic Sentiment, to close out the week.