Daily Market Commentary 18th May 2021

US equity markets turned red to open the new week. The hangover from the shock US inflation number, remains in the forefront of market perception. The impact of this number will be dismissed by the Fed as temporary or transitional, but the PPI rises and retail price rises may confirm a more permanent problem, reality mugging the Federal Reserve Chair. Markets will look forward to the release of the Fed Minutes on Wednesday, but they are predictable, unless there is dissent in the ranks? The US Dollar held steady, with the EUR trading 1.2150, while the GBP edged up to 1.4140.

Chinese Industrial Production and Retail Sales were both positive and in line with expectations, although significantly lower than the previous months gains. The AUD was steady around 0.7760, while the NZD held on to 0.7200, with a better than expected Services PMI number. Local trading will look at the RBA minutes, for some clues to the economy and monetary policy, while the Japanese GDP number should give clues to their economic recovery.