Daily Market Commentary 16th September 2024

Markets closed out the week strongly, with equities surging and the US Dollar easing, as confidence returns. The focus has been on inflation and interest rates, but as inflation has eased, the pressure on Central Banks to ease rates has materialised. The ECB, Bank of England and others, have already began to cut rates, to stimulate economic activity and ease pressure on the consumer. The Fed is expected to follow suit in the coming week. This has driven the surge in economic sentiment and allowed equities to trade around record levels. This coming week is a fest of Central Banks and their interest rate decisions. This should provide upward momentum to equities, downward pressure on bond yields and the US Dollar. The EUR closed above 1.1050, while the GBP broke back above 1.3100.

Commodity currencies have staged a recovery with growing economic confidence, as the AUD looks to regain 0.6700, while the NZD trade around 0.6150. This coming week will be focused on inflation and Central Bank rate decisions, globally, but domestic data may have some influence on trade. New Zealand GDP growth numbers will be closely followed, while Australia Employment data, will play a key role in RBA future plans. The only real threat to market confidence, is economic growth and Geo=Political events, as Europe struggles out of a recession and the US hopes to avoid one.