Daily Market Commentary 12th April 2021

US equity markets closed the week strongly, inspired by the confidence exuded by Central Bankers, the IMF and the World Bank. These organisations met with global Finance Ministers to discuss matters of import. The unanimous report was one of optimism, for global economies and promises of a strong second half of 2021, for growth and recovery. The IMF have taken the opportunity to bolster their SDR fund by a cool $650 Billion, which went largely unnoticed, but has huge global repercussions. US Bond Yields halted their slide overnight, but the US Dollar remained soft. The EUR traded up to 1.1900, while the GBP tests 1.3700, impacted by the AstraZeneca controversy.

US PPI spiked up to 3.1%, reflecting the input cost rises, which will translate into inflation. The CPI will reflect this, although key metrics are not included in many measures, to disguise the extent of inflationary pressures. It is there and cost of living pressures are felt in the supermarket, housing market etc. The trade exposed commodity currencies settled to close out the week, with the AUD drifting to 0.7620, while the NZD slipped back below 0.7050.

The coming week is a plethora of global growth and inflation numbers. The RBNZ will unveil their latest monetary statement. It will leave rates unchanged and pledge further QE, until the cows come home.