Daily Market Commentary 9th May 2023

Markets are looking closely at inflation and growth in the coming week. US and European CPI and PPI readings, will be watching inflation data and growth in Europe and the US, to gauge whether the ‘peak inflation’ has been reached? European inflation has rebounded, once again, so key data will be closely for any rebound upwards. US CPI has been coming down steadily, as the Fed continue to pile on the pressure, through interest rate hikes. The core inflation rate remains worryingly high, in the US, and is the one to watch. The Bank of England is expected to raise rates once again, as inflation holds around 10%, causing much pain for the consumer. This has given some temporary upside to the GBP, which has jumped to 1.2640, while the EUR languishes around 1.1000.

Commodity currencies remain well bid, with the NZD surging past 0.6300, while the AUD looks to consolidate above 0.6750. Australian Building Permits contracted and are now down over 17% for the year. The housing industry is under the immense pressure, from rising interest rates and spirally cost blow-outs. All eyes are on inflation reading across Europe and the US.