Daily Market Commentary 19th August 2022

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US equity markets interrupted the recovery rally and the US Dollar gained ground, with a lull in major data announcements. European inflation hit an all time record high, pushing up to 8.9% p.a., as the ECB’s deferred action monetary policy on tightening bears fruit. Much of the inflationary pain is the energy and food crises, triggered by sanctions imposed by Europe and the USA, while at the heart of the problem is fiscal and monetary extravagance. The Philly Fed survey bounced back into positive territory, but remains severely depressed, while Existing Home Sales contracted a further 5.9%. The EUR is now looking to take another peak at parity, to the US Dollar, while the GBP traded below 1.2000.

Australian Unemployment fell to another record low, edging down to 3.4%, but jobs contracted as participation levels fall. Employment data should be seen as a trend, as measures are heavily disguised by excluding many unemployed in the data measures. The AUD held above 0.6900, while the NZD drifted to 0.6250, ahead of the release of key trade data in todays market trade.

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