Daily Market Commentary 23rd September 2020

Global equity markets stabilised overnight, after suffering huge falls in the previous session, triggered by big rises in European virus infection rates and concerns over major bank indiscretions. The recovery in equities did not address the safe haven moves back towards the US Dollar. The EUR slipped back to 1.1700, while the GBP traded 1.2730, suffering big spikes in infection levels. The UK is looking to reimpose restrictions to combat the spike in the virus, although must remain aware of the failure of lock-downs and balance with the necessity to reopen the economy.

US markets stabilised overnight, after suffering serious losses on equity markets in the previous session. In the last three weeks, stock markets have tested the downside and perhaps a correction is on the cards? Infection rates remain high, but mortality rates have collapsed, so Governments must look to reopen economies as quickly as possible. US Presidential elections continue to dominate the markets until November 3^rd and beyond.

The rising reserve currency has pushed the trade exposed commodity currencies lower, with the AUD retreating to 0.7160, while the NZD pulled back to 0.6630 ahead of the RBNZ meeting. Markets will look at the flash PMI data from Australia and Japan, while NZ markets will be watching the rhetoric from the RBNZ.