Global equity market were lower overnight and the US Dollar bounced. European markets await the ECB rate decision tomorrow night, amidst an environment of rising inflationary pressures and flagging economic growth. The important German ZEW Economic Sentiment report was crushingly bad, falling to 26.5, from over 40. This was mirrored in the EU ZEW report too. European markets consider the ECB reaction and it does not look for any significant change in monetary policy. The US Dollar rebounded off recent lows, with the EUR drifting to 1.1840, while the GBP slipped below 1.3800.
Chinese trade data boosted Asian markets, with exports massively increasing by 25.6%, while imports surged 33%! These positive numbers are a boost to other trading nations. The RBA left rates unchanged and indicated that ‘tapering’ of QE would begin this month, which surprised many considering the devastating lockdowns in much of the country. The damage to economic growth and employment was recognised by the RBA, but they have pinned their hopes on a strong re-open in the final quarter, to boost economic growth and employment. The AUD fell back below 0.7400, while the rising reserve, pushed the NZD below 0.7100.
Local markets await GDP numbers from Japan and the ECB and Bank of Canada rate decisions.