Daily Market Commentary 27th September 2024

Equity markets continue to build on record highs, fired by the Central Banks rate cuts, reducing the cost of money. Asian markets surged overnight, following the Chinese Government endorsement of the PBoC’s decision to stimulate the money supply. This quickly spread to Europe, which saw the Swiss National Bank, cut rates by a further 25 basis points, to 1%. This follows actions by Sweden’s Riksbank and in line with Western Central Bank trends. US Q2 GDP growth held at 3% p.a., which was a relief for markets and now attention turns to the Fed’s favoured inflation measure, the PCE. The US Dollar softened overnight, despite bond yields firming, with the EUR rising back to 1.1180, while the GBP regained 1.3400.

The weaker reserve allowed commodity currencies to regain ground, with the AUD looking to breech 0.6900, while the NZD pushed back above 0.6300. Domestic markets will focus on NZ Consumer Confidence data, while the Tokyo inflation CPI will be the focus of the Bank of Japan. All eyes will be on tonight’s PCE indicator, which is expected to push north.