Daily Market Commentary 17th September 2020

The Federal Reserve ended their latest meeting, promising to maintain record low interest rates for years! This was a shot in the arm for equity markets, which surged on the news. This is likely to be the last we hear from the Fed before the Presidential election, as they avoid any perception of criticism or intervention in the process. US Retail Sales were lower than expected, but the Housing industry continues to flourish, with the NAHB House Market Index, smashing expectations. There is talk that congress may surprise ‘any and all’ and pass an emergency fiscal stimulus bill, hinted at by the Trump administration. The Dollar settled on the FOMC announcement, with the EUR trading 1.1830, while the GBP slipped back below 1.3000.

Markets still await news from the Bank of England and Japan, which will present similar results as the FOMC. Japanese Exports contracted 14.8% in August, while the UK battles through unrewarding trade negotiations with the EU. These pressures may encourage some action/comment from their respective Central banks. The AUD consolidated above 0.7300, while the NZD pushed up above 0.6730, after the NZ Treasury released the Pre-Election Fiscal update. This was an ocean of long-term bad news, but as expected, thus little impact. NZ GDP news may impact in todays trade of the KIWI?