Daily Market Commentary 13th October 2020

US equity markets closed out a huge week of gains, in the week just gone and built on that to open another week. Stocks surged despite the lack of progress on the fiscal bail-out/stimulus package from the US Congress. ECB warned that the EU economy ‘was losing momentum’ and in danger of falling into an even deeper recession, while the virus continues to surge across member nations. Lock-downs have been rejected a weapon to fight the virus, due to the economic destruction it has already caused, but localized measures are being implemented in Spain and the UK. The EUR drifted back to 1.1800, mired in the gloom, while the GBP pushed up to 1.3060.

The rise in equity markets is the direct result of monetary largesse and extreme Central bank policy, across the globe. The rise can only be interrupted by an extreme and negative event, which has permitted the safe haven US Dollar to recede. This has allowed commodity currencies some sort of a recovery, with the AUD holding 0.7200, while the NZD drifted below 0.6650. These currencies will be driven by global markets, although this weeks National election in New Zealand, may have some impact on the local currency.