Daily Market Commentary 4th March 2024

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Gloomy economic conditions have failed to dampen enthusiasm in equity markets, with the tech-heavy NASDAQ closing at all-time record highs. Inflation is on the way down, with the EU latest headline number falling from 2.8% to 2.6%, encouraging rate cuts in the coming months from the ECB. The recessionary economic condition in the European economic zone begs for stimulus and demands cuts to interest rates. The latest PMI Manufacturing Data from Europe confirms that the industrial sector remains in full blown contraction mode, but lower interest rates are not the only solution. The heart of the industrial and manufacturing crises is energy, and the high cost is de-industrialising Europe. The US Dollar relented somewhat at the close of trade Friday, with the EUR bouncing to 1.0830, while the GBP regained 1.2650.

The softer reserve has allowed for some recovery in the commodity currencies, with the AUD breaking back above 0.6500, while the NZD looks to regain 0.6100. The coming week has a wealth of global economic data, with measures of growth and inflation. The US will be firmly focused on the labour markets and their impact on inflation. The US releases a series of important jobs reports, including Jolts, Challenger, ADP and culminating with the all-important Non-Farm Payrolls on Friday.

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