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Daily Market Commentary 9th November 2023

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Equity markets eased overnight, consolidating recent gains, while bond yields continue to fall. German inflation continues to tumble, falling from 4.5% to 3.6%, as the recession and high interest rates bite hard. The ‘peak interest rate’ narrative appears to have spread from the US to Europe. French trade numbers point to entrenched deficits, which will take its toll over time and points to a dearth of demand globally. The recession is great for inflation-busting but terrible for demand, reflected in the further, sharp falls in oil prices. The US Dollar drifted, allowing the EUR to regain 1.0700, while the GBP looks to hit 1.2300.

The lack of global demand impacts commodity currencies, with the AUD easing to 0.6400, while the NZD heads back towards 0.5900. The important Japanese Tankan Report was a boost for confidence, although there were warnings for the final quarter. Flagging global growth as a big problem, Geo-Political issues and a decline in trade with their largest trading partner, China.

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