Daily Market Commentary 18th April 2023

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US markets were quiet, awaiting a slew of corporate earnings, as the season begins in earnest. In the US, the NAHB House Market Index rallied, for some rare positive news in this sector, while the Empire State Manufacturing Index, also burst into positive territory. The good economic news is a sign the economy is coping well, but for the pessimist, it may encourage the Fed to continue to raise interest rates, in the mortal battle with inflation. Italian inflation plunged to 7.6%, from 9.1%, following in the footsteps of most EU countries and the US. Speculation that ‘peak inflation’ has been reached is rife. The only real concern is the rising energy prices, in Europe and the US. The US Dollar continues to regain ground, with the EUR falling back to 1.0900, while the GBP slipped to 1.2350.

A slew of economic data releases from China today will occupy market attention. Chinese GDP growth numbers are expected to excel, while Industrial Production, Employment and Retail Sales, are all expected to shine. The rising reserve pushed the commodity currencies lower, with the AUD falling below 0.6700, while the NZD dropped to 0.6150. NZ Food Inflation numbers remain stubbornly high, ahead of the release of the key CPI number, later in the week. UK inflation will also be a point of interest in the morrow.

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