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Daily Market Commentary 23rd October 2023

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Markets are recognising the crises that was revealed the previous week, with War in the Middle East and Europe, threatening to destabilise global economies. War will hide the inflation and debt crises, enveloping the Western economies, but only for so long. Citizens probably prefer a better option than war, perhaps fiscal and monetary responsibility, by their political leaders? Federal Reserve Chair Powell warned of further inflationary pressures and possible interest rate hikes to come. War will create pressure on oil and energy prices, which will further drive inflation. The US 10-year bond yield fast approaches the magic 5% mark, a level not seen since 2007. The US Dollar has been boosted by the rise in yields, with the GBP falling to 1.2170, while the EUR attempts to hold 1.0600.

The rise in the reserve continues to impact commodity currencies. The NZD has crashed to 0.5800, while the AUD is testing 0.6300, to the downside. This coming week will be highlighted by PMI data from Asia, Europe and the USA. Inflation readings from the US and Australia and the ECB interest rate decision will also drive market sentiment. Geo-Political developments are likely to dominate markets for the week to come.

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