Daily Market Commentary 6th November 2021

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US Non Farm Payroll’s beat expectations, which were not exactly challenging, coming in at 531,000 jobs added for the month. This was a blessing for exhausted equity markets, which surged to record historical highs, after hitting a flat spot. Equities continued to benefit the Fed’s monetary largesse, building an asset bubble, leading an assault across the classes. The only check is inflation. Inflation is heavily disguised in the economic data compilation, but cannot be disguised on the supermarket shelves. The people are not stupid and they recognise the soaring price rises and empty shelves.

The mighty US Dollar is in a state of ruin, but all currencies are relative, hence the evolution of crypto’s. The destruction of ‘hard currencies’ through the delusional ‘modern monetary theory’, is coming to an end, as the reality of inflation bursts the bubbles. You only have to look at what your $$ buys these days. The EUR trade 1.1550, while the GBP has collapsed below 1.3500, due to the spineless Bank of England.

Commodity currencies remain under pressure, with the NZD testing below 0.7100, while the AUD has crashed under 0.7400. The currency weakness is, despite strong commodity prices, a canary in the mineshaft. The UK and Europe are suffering an energy crises and yet double up on the green energy policies that deliberately caused the disaster befalling them. NZ has signed a methane reduction policy at the climate conference in Glasgow, that effectively commits the Government to a war on farmers, the main sector supporting the NZ economy.

CPI and PPI remain the only obstacle to modern economic theory.

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