Daily Market Commentary 30th November 2023

Inflation continues to tumble across the Eurozone, with sharp falls in Spain and across Germany. German inflation plunged to 3.2%, well below expectations and prompting further advances in European equity markets. This was the case in the US also, as the Fed may now be looking at rate cuts in the New Year, further boosting the strong November rally in equities. US GDP growth jumped to 5.2%, from 2.1%, largely due to the massive fiscal spending. Bond Yields continued to fall across Europe and the US, while the USD firmed slightly. The EUR slipped back below 1.1000, while the GBP fell back under 1.2700.

The RBNZ left rates unchanged, but was rather hawkish in the associated commentary, citing room for further rate rises if inflation remains persistent. This triggered a rally in the NZD, which surged to 0.6200, but the rally in the reserve allowed the KIWI to settle back below 0.6150. The AUD suffered the firmer USD, slipping back to 0.6600, aided by a dovish monthly inflation report. Markets await the Fed’s Beige Book.