Daily Market Commentary 3rd November 2021

US equity markets bubbled around record historical highs, ahead of the important FOMC meeting, scheduled to conclude tonight. There are expectations that rates will remain unchanged, but inflationary pressures may see the beginning of ‘tapering’ of the massive QE program. Inflation is surging in the US, while GDP growth is collapsing (on forecasts), into a state of stagflation. The only answer the incompetent regime can offer, is further massive inflationary fiscal expenditure, which would only exacerbate the crises, even more. The Dollar was sharply higher, ahead of the Fed’s Policy decision, perhaps in anticipation of some action to combat runaway inflation? The EUR fell back to 1.1560, while the GBP nose-dived to 1.3600, as the energy crises in Europe extends.

The RBA left interest rates unchanged, in their Melbourne Cup Day meeting, and confirmed no action was required in the foreseeable future. The RBA see no threat of inflation on the horizon, so no need to raise rates from historical lows, which did little to support the currency. The AUD crashed back to 0.7420, while the NZD fell out of bed, plunging to 0.7100!

All eyes are firmly glued to the FOMC rate decision tonight. Congratulations to the connections of the Champion NZ Mare Verry Elleegant, winning the Big One!