Daily Market Commentary 7th November 2023

European and US equity markets consolidated, following a huge week of gains, in the previous week. Confidence surged following the Fed’s latest interest rate decision to halt rises. hinting that ‘peak inflation’ and ‘peak interest rates’ may have already arrived. The softer than expected Non-Farm Payrolls number and the rise in unemployment, was a further boon to market confidence, as this was the last remaining concern for the Fed. European PMI data was weaker than expected, remaining deep in contraction mode, as the ECB fight inflation through recession. US Bond Yields rebounded upwards, following heavy falls in the previous week, although the US Dollar was steady. The EUR held above 1.0700, despite the bleak economic news, while the GBP traded above 1.2350.

The Bank of Japan minutes confirmed that their extraordinarily accommodative monetary policy, would continue unabated, with no dissent. The RBA meet today and are expected to raise rates, under cover of the Melbourne Cup, which takes all the focus in Australia. The RBA Governor was appointed as an obedient servant of the Government. rather than the independent servant of the people, and they may get away with further rate rises in the face of aggressive inflation. The AUD slipped back below 0.6500, ahead of the all-important meeting, while the NZD held above 0.5950.