Daily Market Commentary 30th March 2022

The Ukraine/Russia peace negotiations in Istanbul, Turkey, looked to be making progress overnight and boosted market confidence. The Russians have agreed to reduce activities around the Capital Kiev, but the real military action is concentrated around the Eastern disputed Donbass. These developments gave markets confidence, with global equities on the rise, while the USD was softer. The EUR rallied back above 1.1050, while the Yen pushed back, to 122.00.

The Australian Federal Budget was delivered last night and was full of fiscal promises, as expected on the eve of an election. There was a recognition of the economic crises around the global economy and action to address cost-of-living pressures and rising inflation. The rhetoric was around ‘how well Australia had managed the crises’ and fared better than all other developed countries. ‘In the land of the blind the one eyed man is King!’

US markets are looking ahead towards the Non Farm Payrolls number, released at the end of the week and the ADP and Challenger Jobs reports as precursors. Their is a lot of talk around the inversion of the US Bond yield curve, as this is a strong historical predictor of a recession. The yield curve has been toying with inversion.

The softer reserve allowed the NZD to regain 0.6900, while the AUD struggled to regain 0.7500, following the Federal Budget. The Ukraine/Russia peace talks remain a focus for market direction.