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Daily Market Commentary 4th July 2023

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A very quiet start to the trading week, as most of the US is closed for the ‘long weekend’ of the Independence Day holiday, which falls on Tuesday the 4th of July. There was a slew of Manufacturing PMI data out across Asia, Europe and the USA. Manufacturing continues to be extremely week, especially in Europe, led by Germany, who are suffering particularly harsh conditions. The energy crises have hit German manufacturing extremely hard, to the point of a degree of ‘de-industrialisation’. Manufacturing was also weaker across Asia and the USA, but equities continue to trade near record highs. The softer US Dollar allowed the EUR to trade around 1.0900, while the GBP looks set to regain 1.2700.

Commodity currencies are beneficiaries of the softer reserve, with the AUD pushing back to 0.6650, while the NZD consolidates above 0.6100. Australian Building Permits jumped 20.60%, but this has   been an extremely volatile number, with a housing industry under immense pressure. NZ Building permits contracted 2.2%, as local markets await the key Business Confidence number, to be released later today. Markets will remain quiet as the US celebrates Independence Day.

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