Daily Market Commentary 28th June 2021

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US Equity markets reached for record historical highs, to close out a week of recovery and economic spin. Markets had been shocked when Treasury Secretary Yellen and Federal Reserve Chairman Powell both recognised the inflation problem and forecast some monetary action. The overt honesty, by the political pair, was refreshing and disruptive to market narratives. They both spent the week walking back their co-ordinated recognition and reverted to ‘plan B’. Obfuscation is a word that describes their new narrative.

US Banks surged following the Fed’s Bank Stress Test report. The Federal Reserve gave major Banks the green light for further ‘Share Buy Backs’ and Dividend pay outs. The Federal reserve have given the Banks free money and now allowed them to use it, to remunerate themselves and their shareholders. The University of Michigan Economic Sentiment report professed gains, but not up to expectations. Bond Yields remain static and the US Dollar soft. The EUR traded 1.1920 and unmoved, while the GBP continued to flounder, falling to 1.3880.

Commodity currencies enjoyed the weaker reserve, with the AUD pushing up towards 0.7600, while the NZD broke back to 0.7050. The markets will focus on US Employment numbers in the coming week, culminating in the Non Farm Payrolls number on Friday.

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