Asian markets followed US markets higher yesterday, with market confidence surging, allowing big gains on equity markets. The enthusiasm was tempered in Europe as the French political crises deepens. The minority French Government avoided a Parliamentary vote for the Budget, through Constitutional procedure, thereby bringing on a possible vote on no confidence. This will likely topple the Macron, minority Government, and probably force new elections. US Markets took a breather after logging huge gains for November in what is now known as the ‘Trump Rally’. The US Dollar was slightly softer overnight, with the EUR breaking back above 1.0500, while the GBP traded 1.2650.
The softer reserve allowed the AUD to head back towards 0.6500, while the NZD languished below 0.5900. The RBNZ has signaled intent to continue aggressive rate cuts, turning sentiment against the KIWI. Markets will be looking closely at Australian growth and NZ Commodity Prices on domestic trading today.
