A calm open to trading on markets this week, ahead of a very busy week for many Central Banks. The Federal Reserve lead the way, with an interest rate decision, and are joined by the BoJ, BoE, Swiss National Bank and the PBoC. This is a huge week for monetary policy and adding to the excitement, the Chinese announced big plans to boost consumer demand and investment. Chinese Retail Sales were up, and Industrial Production remains strong, but the Chinese Government see a need to boost the consumer, and a demand led domestic economic recovery. The Germans look set to vote on the ‘Debt Brake’, which requires constitutional changes, to massively increase deficit and debt spending. The Germans are playing with fire, reckless deficits and debt spending, will only lead down the road to perdition. The German have been the voice of monetary and fiscal reason in Europe, over the last couple of decades, but this would change all of that. The US Dollar remains soft, with the EUR regaining 1.0900, while the GBP heads toward 1.3000.
The weaker reserve allowed for further recovery of the commodity currencies, with the NZD breaking back above 0.5800, while the AUD heads back towards 0.6400. Tariffs are likely to continue to dominate the economic and political landscape, while the market focus will be on Central Bank monetary policy.
