Daily Market Commentary 24th April 2024

Confidence continues to surge on European and US equity markets, looking to regain the horrific losses of the previous Geo-Politically triggered rout. The UK FTSE100 ventured into record territory, while US equities looked to surge back into unchartered territory. Sentiment is strong, as fears over the Middle East have calmed and put firmly in the rear-view mirror. The war rages on in both Israel and the Ukraine. It is the escalation and expansion that worries the markets. PMI data from Europe is showing signs of improvement, although Manufacturing remains deep in the doldrums, while US PMI drifted backwards. All eyes are on the US GDP growth data and the PCE inflation indicator. The Bank of England Chief Economist, Huw Pill, confirmed inflation remained a problem in the UK and that rate cuts remained some way off. This was enough to reinvigorate the GBP, surging back to 1.2450, while the EUR pushed back up to 1.0700.

The weaker reserve allowed the recovery of commodity currencies to continue, with the AUD heading back towards 0.6500, while the NZD consolidates above 0.5900. Local markets will be consumed with the Australian Q1 inflation data release, with big falls expected, while the NZD trade data will interest NZ domestic markets. Manufacturing in Europe remains crippled, and the wars have the potential to spiral outwards, so significant volatility and risks remain.