Daily Market Commentary 11th September 2023

Markets closed the week out flat, but bond yields appear to be on the rise again, as do energy prices. Natural Gas prices spiked, as Oil has done recently, sparking fears of energy prices adding to inflationary pressures in Europe again, this coming winter. This will only add to inflationary pressures, bond yields and recession. Oil production cuts have been extended from both Russia and Suadi Arabia, until the end of the year, so Oil looks set to continue to rise. The rise in US Bond Yields (in an extended inverted yield curve) have supported a resurgent US Dollar, pushing the EUR back to 1.0700, while the GBP has slipped to 1.2450.

The rising reserve has eased the AUD back to 0.6370, while the NZD has dropped back to 0.5860. A labour strike in the Natural Gas facility in Western Australia is having global repercussions, with spikes in the European natural gas futures price. Energy prices are on the rise, which will only add to inflationary pressures in Europe. Chinese commodity demand has been slow, as the much-vaunted economic rebound, has stuttered. The week ahead will focus on inflation, energy and growth. The ECB will announce their latest monetary policy decision this coming week, and they are expected to hold interest rates at current levels. The heat will be on Central Bankers as energy prices rise.