Daily Market Commentary 13th September 2024

The ECB cut rates to 3.5%, from 3.75%, in line with expectations. Inflation crept higher, with the CPI rising to 2.3%, within the Eurozone. This was enough to set equity markets alight once again, but bond yields crept slightly higher, as inflation pipped upwards. All eyes now turn to the Fed, who are expected to embark on the rate cutting cycle next week. US inflation fell back to 2.5%, while PPI was turning higher, allowing the Fed the opportunity to cut interest rates. The question will be how much with the Fed cut rates by? The US Dollar headed lower, allowing the EUR to recover 1.1050, while the GBP jumped back to 1.3100.

The softer reserve allowed further gains in commodity currencies, with the AUD surging back above 0.6700, while the NZD bounced strongly off 0.6100. The AUD continues to benefit the interest rate differential advantage against most major partners.