Daily Market Commentary 30th August 2023

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Markets are rebounding from a very negative August, with equities rebounding and the US Dollar fading. US equities continued to regain some lost ground, boosted by the prospect of lower inflation and a softer jobs market. Market analysts are still mulling over the Fed Chairmans latest utterings, concerning inflation and possible interest rate rises. Markets will focus on the actual inflation levels in Europe and the US, as the tight labour market in the US, has been supporting stubbornly high inflation. The Jolts Job Openings report came in at 8.825 million job openings for July, with a revision of June lower. This is an indication that the Jobs market is cooling and is exactly what the Fed is looking for, to relieve pressure on the wage/price inflation. This was boost to equities and allowed US Bond Yields to soften, along with the US Dollar. The EUR jumped back to 1.0870, while the GBP quietly moved up to 1.2630, despite the UK holiday.

The softer reserve allowed some relief for commodity currencies, with the AUD moving back to 0.6450, while the NZD bounced back strongly off 0.5900. Markets will look ahead to European inflation numbers, released tonight, along with the ADP jobs report in the USA.

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