Daily Market Commentary 23rd July 2021

The ECB left rates unchanged and QE Infinity firmly in place, as expected, but did offer that some review of QE in September may be possible. The ECB are under no pressure to end the extreme and excessive monetary largesse, as the EU economic zone, is experiencing little or no real growth. This acts as a counter-weight to the upward pressure of prices and costs, in the form of PPI and CPI. The economic situation remains dire, with Consumer Confidence contracting 4.4%, while the EUR continues to flail. The EUR fell back to 1.1760, while the GBP bounced back to 1.3770, ahead of key economic data releases including Retail Sales, Consumer Confidence and flash PMI numbers.

US Weekly Jobless claims rose to higher than expected levels and Existing Home Sales unexpectedly jumped 1.4%, but this did little for the US Dollar. This allowed the commodity currencies to stabilise after significant recent losses. The NZD traded around 0.6950, while the AUD pushed back to 0.7370, ahead of key PMI data. Much of Australia remains in economic limbo, as NSW, Victoria and South Australia suffer the onerous and political lock-downs.

Look ahead for flash PMI data in Australia, Europe and the USA.