Daily Market Commentary 22nd December 2022

The ‘Santa Claus’ rally was underway on global equity markets overnight, with big rises on bourses across Europe and the USA. The surging Christmas rally seems to come every year, but the trigger seems to be unfounded sentiment, rather than any economic data release. US Consumer Confidence was better than expected, but Existing Home Sales fell 7.7%. German Consumer Confidence remains in the doldrums, while inflationary pressures appear to be easing, due to softer energy prices. The heart of winter is upon Europe, so the energy crises may once again reignite, pushing sentiment back down. The US Dollar was regaining some ground, with the EUR slipping below 1.0600, while the Yen drifted back to 132.00

Commodity currencies are suffering a rising reserve, with the AUD trading below 0.6700, while the NZD dropped under 0.6300. Rising NZ Trade deficits continue to add to the gloomy economic circumstances and the flagging currency comes as no surprise, considering recent record lows in both Consumer and Business confidence. Markets will look at growth and inflation, especially the US PCE inflation measure,

but may just put it all aside for a few days of Christmas?