Daily Market Commentary 12th November 2021

The US inflation story continues to dominate global markets, as the CPI, is the truth that exposes the Federal Reserve’s lie. The Fed have continually denied the surging inflation in the economy, labelling it ‘transitory’, as it destroys the modern monetary theory. Central Banks cannot continue to print money, to fund debt issuance from respective treasuries, without consequence. The only voice of reason and sanity in the fiscal and monetary policy world, is inflation. US Bond Yields continue to rise, supporting the US Dollar, as pressure mounts on the Fed to not only cut QE, but raise interest rates. The EUR collapsed to 1.1440, while the GBP crashed to 1.3350, despite positive Manufacturing and Industrial Production data. UK GDP was 5.3% pa, but was lower than expected and the previous month was also revised lower.

Australian employment data missed market expectations, with a loss of a further 46,300 jobs in the economy, while the headline Unemployment rate spiked up to 5.2%. The shock number was written-off by markets, as the product of NSW and Victorian lockdowns. These have both now ended, so markets look forward to the normal resumption of business, perhaps? The Unemployment data heavily disguises the reality of massive unemployment in the economy, so the trend is the only accurate measure. US inflation news has sparked a rally in the reserve, trouncing the commodity currencies. The AUD has fallen below 0.7300, while the NZD crashed to 0.7000, testing the ‘Big, Big Figure’ to the downside.

Inflation and growth remain key to economic narratives and the PPI/CPI revelations are confirming we are almost in an era of runaway inflation and decelerating growth, stagflation.