US Retail Sales turned negative, in the latest reading, reflecting lower consumer confidence and weak domestic demand. Trump announced ‘Reciprocal Tariffs’ for the entire world, and this set a cat amongst the pigeons, with the US Dollar crashing. The EUR spiked to 1.0500, while the GBP hit 1.2600, despite gloomy economic conditions in both the UK and Europe. Germany has found the solution to inflation, deep and extended recession, as their CPI flatlined at 2.3%. This coming week will kick off slowly, as the US celebrates the President’s Day Holiday, while other markets await the latest policy shocks from the US.Local markets will be focused on Central Bank Interest Rate Decisions (IRD’s), coming from China (PBoC), Australia (RBA) and New Zealand (RBNZ). The RBA is expected to embark of interest rates cuts, for the first time in this economic cycle, while the RBNZ is expected to continue to cut, and perhaps by 50 basis points. The Australasian economies are suffering economically recessionary conditions and require monetary and fiscal stimulus, due to poor economic management. The RBA has been reticent, due to stubborn inflation, but may finally flick the switch. Commodity currencies open the week strongly, following the precipitous fall in the reserve currency, with the AUD jumping to 0.6350, while the NZD reclaimed 0.5700.
