Daily Market Commentary 3rd November 2023

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Global equities continued to celebrate the Fed’s latest monetary policy decision. The Fed left interest rates unchanged and described an almost perfect economic scenario, where the Labour markets coos and economic growth remains strong. Markets ate this vision up, with equities charging ahead and bond yields tumbling. The Bank of England joined the party, leaving rates unchanged and hinting that the interest rate hikes may have come to an end. The US Dollar was weaker, with the EUR jumping above 1.0650, while the GBP surged above 1.2200.

Commodity currencies also felt the benefit of the softer reserve, with the AUD rallying above 0.6450, while the NZD broke back above 0.5900. Markets are awash in confidence and now await the important Non-Farm Payroll number, set to be released tonight. The lead-up reports have been neutral, with the Jolts Report showing rising job openings, while the Challenger report showed less job cuts. The Non-Farm Payroll number is expected to be soft, but it would need to be ‘next-level’ bullish to shake market confidence in the current environment.

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