US equity markets surged on the Friday close, sparked by the cooler than expected inflation number, released Friday. The CPI number was the only Government statistic released in another week of Government shutdown. The CPI rate came in at 3%, cooler than expected, thus green-lighting the Fed to accelerate rate cuts. The anticipated rate cuts only serve to increase market confidence and drive investment. The US Dollar remained steady, with the EUR trading above 1.1600, while challenges the downside of 1.3300.
Commodity currencies continued to stabilise, with the NZD building above 0.5700, while the AUD grimly held 0.6500. This coming week will focus on Central Bank activity, with rate decisions coming from the Fed, Banks of Canada and Japan and the ECB. The Fed and the Bank of Canada are expected to cut rates further, while the ECB is at relative lows.
