Daily Market Commentary 26th August 2021

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The lack of substantive economic data releases overnight, allowed the narrative to remain on the positives and the upcoming Jackson Hole symposium. US Durable Goods Orders contracted and Weekly Mortgage Applications improved from recent weakness. The mixed and slow economic front was overwhelmed by the re-opening narrative and the roll-out of the vaccine. Global Central Bankers will begin their symposium tonight and this will be lead by Fed Chair Jerome Powell. He is likely to be fully of positives, with caveats, to straddle the proverbial fence. He will likely announce the curbing of the US$120 Billion/month QE program, ‘tapering’, but confirm no interest rate rises in the near future. Inflation is on the march and other Central Banks have already set off down this road and rate rises will be coming from some Central banks, sooner rather than later.

The US Dollar continues to beat a retreat, with the GBP trading 1.750, while the EUR rose to 1.1750, despite a weaker than expected German Ifo Business Climate reports. Commodity prices continue to support the associated currencies, with the AUD pushing up above 0.7250, while the NZD broke 0.6950. NZ trade data was steady with a noticeable rise in imports, but all attention is now on Jackson Hole and US GDP number, which are also set for release tonight.

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