Daily Market Commentary 30th April 2024

Markets opened the week on a positive note, with US and European equities climbing and bond yields on the decline. The week will be dominated by growth and inflation in Europe, while the US will be focused on the looming Fed interest rate decision and key employment reports. Swedish growth numbers confirmed the Scandinavian country is in recession, while German and Spanish CPI data may be indicating the precipitous fall in European inflation, may have stalled. The German preliminary inflation rate has stalled around 2.2%, while Spanish headline inflation jumped to 3.3%. Inflation appears to be on the rise again in the US, and the Fed is likely to leave rates at these elevated levels, until they see confirmation that inflation is ‘back in the box’. The US Dollar was softer and allowed the EUR to pop up to 1.0720, while the GBP jumped back to 1.2550.

The real focus on currency markets was the precipitous decline in the Japanese Yen. The Japanese markets were closed for a timely public holiday, with the Yen crashing to 34-year lows, blowing through 160.00. There may have been some intervention, as the Yen rapidly recovered some lost ground, to trade 156.00. Markets eagerly await the open of today’s trading. Commodity currencies meanwhile benefited the softer reserve ahead of the Fed rate decision, with the AUD pushing up to 0.6550, while the NZD jumped above 0.5950.