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Daily Market Commentary 20th November 2023

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Market confidence continues to grow, as inflation tumbles across Europe and the US, signalling a probable end to Central Bank interest rate rises. The latest confirmation, came from the EU latest inflation reading, with the headline rate plunging from 4.3% to 2.9%. This is great news for Central Bankers and the wider economies, as interest rate rises have damaged growth. The problem now is reigniting economic growth without inflation. The November rally in equity markets continues, as does the fall in US and European Bond Yields. The US Dollar was softer, allowing the EUR to regain 1.0900, while the GBP pushed back to 1.2450.

The inflation problem is falling from the headlines, but the weak European and US economies have hit commodity demand hard, as evidenced by the recent collapse in Oil prices. The weaker reserve has been offset by flagging demand pressures, with the NZD holding below 0.6000, while the AUD struggles to hold 0.6500. The coming week will focus on economic growth and Central Bank speculations and commentaries.

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