DAILY MARKET COMMENTARY 19TH MAY 2020

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Global markets exploded with confidence, to open the new week, sparked by news of progress on a vaccine and some positive words from the Federal Chairman. Global economies continued to re-open and the viral infection rate appears to be under control. A vaccine by ‘Moderna’ looked to be making good progress and this added to the enthusiasm and confidence in markets. The Federal Chairman, Jerome Powell, expressed confidence in the US economic recovery and promised that there was ‘plenty of ammunition’ left in the Fed’s arsenal. The Dow surged by more than 900 points, along with other share markets across the US and Europe. The safe haven of the Dollar declined, with the EUR regaining 1.0900, while the GBP approaches 1.2200 once again.

The surge in market confidence spread to commodity prices, with Oil charging up to US$31.60/barrel. The surging market confidence assisted the maligned commodity currencies, with the AUD jumping back above 0.6500, while the NZD pushed back to 0.6020. The re-opening of global economies and the containment of the virus are driving market confidence. Economic data has been devastatingly bad, but it appears lows may have been reached and gains may begin, albeit off record low levels.

The progress of  progress of economies reopening and the containment of the virus are driving market recovery. Central Banks commentary and growth data are supporting the economic narrative.

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