Daily Market Commentary 26th September 2024

The OECD sharply upgraded the UK’s economic growth forecasts. The expected performance was expected to improve from 0.4% in 2024 to 1%, while 2025, the performance is expected to improve from 1% to 1.2%. This reflects the recent improvement in economic data coming out from the UK but may well be impacted by the financial plan of the new Labour Government, with the budget due next month. The Swedish Central ‘Riksbank’, cut rates by 25 basis points and flagged two more probable rate cuts, this calendar year. Central Banks are on a charge, to stimulate economic activity and lift Europe out of recession, while preventing one in the US. The focus in the US is now economic growth and the latest GDP number (due out tonight), will tell a story. The US Dollar gained ground across the board, with the EUR drifting back to 1.1140, while the GBP fell to 1.3330.

The stronger reserve curbed commodity currency gains, with the NZD falling back to 0.6270, while the AUD dropped to 0.6830. The latest inflation data out of Australia, released yesterday, was better than expected. The headline rate fell from 3.5% to 2.7%, which will hearten many, including the RBA. The RBA have been steadfast in their policy to wipe out stubborn inflation and this will be welcome news. All eyes now turn to growth in the US, while Geo-Politics threaten.