Daily Market Commentary 22nd September 2023

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Markets digested the Fed interest rate decision and a slew of European Central Bank monetary policy decisions and decided that it was heading negative. Equities tumbled and bond yields surged higher, with the US  10 Year, hitting 15-year highs. The Bank of England left rates unchanged, reacting to the lower-than-expected inflation data, and confounding expectations. The Swiss National Bank also left rates unchanged, but two Scandinavian Banks, both decided to attack the recent resurgent inflation. Both the Swedish and Norwegian Central Banks raised rates 25 basis points, while the Turkish Central Bank, raised rates 500 basis points to 30%! The Fed hit the pause button, but the ‘higher for longer’ mantra spooked markets. The US Dollar pushed higher, with the EUR falling to 1.0620, while the GBP crashed to 1.2250.

The rising reserve pushed commodity currencies lower, with the AUD slipping below 0.6400, while the NZD tests 0.5900, to the downside. Local markets will focus on the Bank of Japan and their latest monetary policy decision, while PMI data from Asia, Europe and the America’s will be keenly watched.

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