Daily Market Commentary 7th June 2022

British PM Boris Johnson faced a no-confidence vote from his own Conservative party overnight. This has come as his policies and scandals have blown away his support and popularity, post-Brexit. The lock-downs and the growing cost-of-living crises are all damaging BOJO’s popularity in the lectorate, so now the Tory MP’s will test his support amongst the MP’s. The real problem now is the energy and food crises gripping the nation, only exasperated by his hard-line stance over the Ukraine war and the associated sanctions, that back-fired, aggravating to cost of food and energy. The GBP held above 1.2500, ahead of the vote, while the EUR dipped below 1.0700.

Australian inflation was markedly higher, in the gauge released yesterday and looks to confirm the RBA’s actions, to combat the growing problem. The AUD trades just below 0.7200, ahead of the key RBA meeting, the first under the new Labor administration. Chinese Services and Composite PMI bounced back, following the easing of COVID restrictions, but still remain depressed. The NZD is trading lower, following the resurgent reserve, boosted by the US 10 year bond yield, which broke back above 3% again.

All eyes are on the RBA and the anticipated rate rise, with the tone of the narrative becoming extremely influential.