Daily Market Commentary 14th April 2023

US PPI turned negative and this follows a softer than expected inflation number, setting equity markets alight. It appears ‘peak inflation’ has been reached and the Fed will be able to hit the pause button on further interest rate rises, after the final 25 basis points telegraphed. German inflation crashed lower, falling to 7.4%, from 8.7%. The inflation crises appears to be over, despite the war in the Ukraine raging on and energy prices surging. This lead to a lower US Dollar, with the EUR rallying up to 1.1040, while the GBP hit 1.2520. UK GDP growth was flat, but sharp contractions in Industrial and Manufacturing production, contradict the benign growth data.

Commodity currencies were beneficiaries of the softer reserve, with the AUD surging towards 0.6800, while the NZD jumped to 0.6300. Australian Unemployment numbers were stronger than expected, with the headline rate holding 3.5%, despite tougher economic conditions. Markets remain buoyant following the latest inflation data from the US and Europe.