US Markets rallied Friday, to close out a strong week of gains, as the Trump rally continues. Certainty breeds confidence in markets and the prospects of a Trump administration, following the disastrous Biden regime, is compelling. The promise of a complete overhaul in Government spending under Elon and Vivek, is tantalising, while a tariff impost to enable fair trade, is massive rethink of the US economy. The real positive is that this will spread across the West, touch wood, as other economies will either sink or swim. This coming week will look at inflation and growth. Inflation appears to be re-emerging in Europe, without the growth, so they are caught between a rock and hard place. Geo-Politics remain a threat to markets. The US Dollar once again posted gains Friday, with the EUR falling as low as 1.0340, while the GBP plunged below 1.2500.
The surging reserve hit the NZD hard, crashing to 0.5820, while the AUD dipped back below 0.6500. The AUD remains fairly well supported, as the RBA holds fast on high interest rates, supporting an improving and increasingly attractive interest rate differential. This coming week, domestic markets will follow Australian inflation data and the latest RBNZ interest rate decision. The RBNZ is expected to cut rates further, perhaps by 50 basis points, stimulating the economy but undermining the KIWI.
