US equity markets continue to book gains, building on last weeks rally, despite some terrible economic data. Flash PMI numbers out in Europe, UK and the US were dreadful. Germany and the UK crashed deeply into negative territory, reflecting the dire state of the European economy, while the US also crashed heavily into the contraction zone. Equity markets are rallying on the prospect of the Fed halting interest rate rises, or at least slowing the rate of the rises, but these are not likely. The GBP was steady, trading 1.1270, following the announcement of yet another PM. Rishi Sunak is the next cab off the rank and should have perhaps been in there before the train-crash that was Liz Truss. He is a very capable man but the crises that confronts him may be far too great?
US Bond Yields continue to surge, contradicting market speculation, which may explode the myth. Inflation is rampant and the only solution is raising interest rates and reducing the money supply. The Fed must remain firm, but there is immense pressure ahead of the all-important US Mid-Term elections. The rebound in the reserve pushed the NZD back to 0.5660, while the AUD fell back to 0.6280 ahead of the Labor Governments first budget. It will be a tough budget, considering the state of the books, bequeathed to them by the hopeless SCOMO Liberal administration. The key will be the budget forecasts, as Labor tends to the heroic, on revenue forecasts?!