Daily Market Commentary 15th April 2024

US equity markets tumbled again Friday, stoked by fears of persistent inflation, which is not going away. US inflation has been on a steep decline, as has European, but the last reading showed a sharp reversal and a spike upwards. Markets are speculating that this will cause the Fed to defer expected rate cuts, until later in the year, punching US equities in the proverbial gut. European inflation continues to decline, and expectations are that the ECB will proceed with their much-vaunted interest rate cuts, in the next couple of months. This will drive the already marked interest rate differentials between Europe and the US, adding downward pressure to EUR. The EUR shed further ground, plunging to 1.0640, while the GBP crashed below 1.2450.

The rising reserve hit commodity currencies, but failed to curb the inexorable rise of gold, a litmus for the storage of wealth and the health of the said reserve currency. The NZD plunged to 0.5930, despite a hawkish statement last week from the RBNZ, while the AUD tumbled to 0.6450. This coming week will focus heavily on inflation and growth in Asia and Europe, while the US markets will be considering the Fed’s position and possible threats to the all-important Banking Industry.