Weekly Market Commentary commencing 8th February 2021

Markets had a huge week of gains on equity markets, as the extreme and unprecedented liquidity from QE Infinity, overwhelm any concerns over a retail share market rebellion over institutional short positions. Wall Street fought back, through banning retail consumers from the market and setting regulators on recalcitrant players. There can be and will be long term legal consequences, but the pressing issue has been sorted, by the powers that be.

The US Dollar has been fighting back all week, but profit taking allowed the EUR to jump back to 1.2040, while the GBP surged to 1.3730. UK and European lockdowns have destroyed the first quarter numbers, but upbeat Bank of England commentary, has allowed a forward looking approach. The UK has a plethora of economic data releases this coming week, highlighted by GDP growth numbers, Trade and Industrial/Manufacturing Production. Expectations are low, which may allow markets to fuel further asset bubbles.

The trade exposed commodity currencies have been enjoying a purple patch, due to their relative immunity from the pandemic and partially contrived economic statistics. NZ and Australian employment numbers are unbelievably low, camouflaged by statistical compilation methodology and welfare disguises. Extreme liquidity from monetary policy continues to drive market direction although the economic reality will have future consequences.