Daily Market Commentary 11th May 2021

Markets continued to process the shocking Non Farm Payrolls number that took markets by surprise last Friday. The expectations were that nearly 1,000,000 jobs would be added to the US economy, as it reopened, but only 266,000 were added and the previous month was reviewed lower! This sparked a rally in markets, as the bad news assured markets that the Fed’s extremely accommodative monetary policy would continue. The US Dollar has crashed, with GBP soaring to 1.4150, while the EUR pushed 1.2150.

The weak Dollar insured commodity prices remained bid, with the associated currencies reflecting this. The NZD traded 0.7275, while the AUD rallied to 0.7850, supported by stronger local Retail Sales and Business Confidence numbers. The data releases this week is dominated by growth and inflation. Look closely at input prices, which will dominate retail prices and inflation.