Daily Market Commentary 23rd April 2021

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European markets posted gains following assurances from the ECB that interest rates would remain low and QE infinity would remain for the foreseeable future. The ECB acted in line with global Central Banks, keeping the monetary floodgates open and ‘flooding the zone’. The rhetoric was banal, as is the predictable line, that has been followed by the Fed and other significant Central banks. Will QE ever finish, or even tapered, is the question that will be answered only by inflation.

US market spiralled lower, as shocking news of a massive hike in Capital Gains Tax, took hold of markets. The Biden administration is considering doubling the CGT to more than 40% plus!? The tax hikes are a major worry for Wall Street and ignites fear, where endless fiscal and monetary largesse, record deficit and debt, are fawned upon. Equity markets went lower, bond yields went lower, while the US Dollar looked to solidify. The EUR dipped below 1.2000, while the GBP slipped back to 1.3830, awaiting the latest PMI data.

The commodity currencies have been quietly progressing, but the bounce in the reserve, forced a correction. The NZD fell back to 0.7150, while the AUD looks to test 0.7700, on the downside. Global PMI data will be influential in local markets, while the ECB quietly informed markets that their Debt/GDP, was fast approaching 100%!

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