Daily Market Commentary 16th April 2024.

The Iranian large-scale missile/drone attack on Israel, in retaliation for Israeli attack on their Syrian consulate, raised fears over the weekend that markets may panic on the open. This did not eventuate, as the outcome and backlash were mild. It appears the Iranians have wreaked their revenge upon Israel, in coordination with the US allowing loss of life and damage to be minimised and pride to be restored. It does not appear there will be any further escalation, so markets have calmed. US and European bond yields firmed, and US equities were lower, but this is markets in their comfort mode. The US Dollar was slightly higher, with the EUR dipping to 1.0630, while the GBP drifted to 1.2440. Oil prices remained steady, which adds to the narrative, although gold continues to surge.

The stronger reserve pushed commodity prices even lower, with the AUD falling to 0.6440, while the NZD fell back to 0.5900. NZ Services (PSI) and Composite (PCI) both fell back into contraction territory, confirming the tough NZ economic conditions. Markets will monitor the Middle East situation and react accordingly.