Markets are all about Central Banks, speculation and actual action from the Fed, Bank of England, Bank of Japan and the PBoC. The Federal Reserve is likely to cut but all the rest are likely to hold. Inflation has reared its ugly head again across the US and is creeping back into Europe. Central Banks are reticent to cut rates further and add fuel to the inflation fire. European markets fell, following the appointment of France’s forth Prime Minister for the year. Macron is playing dangerous political games and the uncertainty manifested is damaging. Moody’s downgraded the French ratings. The US Dollar was weaker, allowing the EUR to regain 1.0500, while the GBP bounced back towards 1.2700.The weaker reserve allowed the commodity currencies to consolidate off lows, with the AUD holding above 0.6350, while the NZD struggles back towards 0.5800. NZ Business PSI data was stronger than expected, while Australian PMI data was weaker. All eyes are on the Central Banks and speculation leading into the decision making.
