Collinson FX: Apr 11: European inflation drops, US interest rates expected to drop mid-year

by Collinson FX 11 Apr 15:39 NZST 11 April 2024

RS Fevas racing in the SailGP Inspire program - Lyttelton - March 23, 2024 © Justin Mitchell

April 11: NZ still on high end of inflation rates

US CPI inflation data was hotter than expected, reversing the trends lower, spiking up to 3.5%. This combined with the Fed Minutes, confirming the need to hold rates ‘higher for longer’, until inflation returns to 2%, or below. This had an immediate impact on markets, with bond yields and the US Dollar all gapping upwards, while US equities tumbled lower. Markets are now not expected any interest rate relief until the second half of the calendar year. The surge in US Bond Yields, supported the stronger US Dollar, with the Yen collapsing towards 153.00. Europe appears to be dealing with inflation much better, by slamming their national economies into deep recession and this was reinforced by the latest Norwegian inflation reading. Norway’s inflation plunged to 3.9%, from 4.5%, copying other EU nations. The EUR crashed to 1.0730, while the GBP slumped back towards 1.2500.

The resurgent reserve reversed recent gains in commodity currencies. The RBNZ left rates unchanged in NZ, but talked a big game, about holding rates higher and squeezing out inflation. This has the desired impact on the NZD, which initially pushed upwards, but the news from the US on inflation, destroyed that narrative. The NZD crashed back to 0.5970, while the AUD looks set to test 0.6500, to the downside. Inflation fears and warnings over the Chinese economy from ratings agency Fitch cast a pall of gloom over markets.

For the latest and recent market commentaries from Collinson & Co see collinsonco.com/news-updates

Catch the new look Collinson FX website at www.collinsonco.com

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site

For the latest and recent market commentaries from Collinson & Co see collinsonco.com/news-updates

Related Articles
Collinson FX are at the Hutchwilco Boat Show
Collinson Forex, a prominent financial services company, is at the Hutchwilco NZ Boat Show Collinson Forex, a prominent financial services company, is making a notable presence at the NZ Boat Show in Auckland from the 18th-21st of May, demonstrating their commitment to the industry. Posted on 19 May 2023 Collinson FX: Jan 20: No change with PM's exit
The NZ ‘PM of Aotearoa' resigned yesterday, which had little impact on the currency. The NZ ‘PM of Aotearoa' resigned yesterday, which had little impact on the currency, as this will have little impact on the NZ economy. Posted on 19 Jan 2023 Collinson FX: Dec 5 - Risk appetite rallies
US Federal Reserve Chairman confirms the rate of future interest rate rises may slow US Federal Reserve Chairman confirms the rate of future interest rate rises may slow, as early as December. Posted on 5 Dec 2022 Collinson FX: Sept 30 - A finger in the dyke
Inflation remains the big problem haunting Central banks across the Western world The Bank of England in an effort to combat the reckless unfunded UK Government's fiscal spendathon mini-budget, kept bond yields lower but is a finger in the dyke. AUD crashed back to 0.6450, while the NZD plunged to 0.5650 Posted on 29 Sep 2022 Collinson FX: June 15 - 'Bear' territory
Markets are crashing across the Western world, with equities charging into ‘bear market' territory Markets are crashing across the Western world, with equities charging into ‘bear market' territory, while crypto's collapse. Posted on 14 Jun 2022 Collinson FX: June 14: Equity markets routed
The rout on equity markets continued overnight, to open the new trading week and spread The rout on equity markets continued overnight, to open the new trading week and spread to bond and currency markets Posted on 13 Jun 2022