Daily Market Commentary 10th February 2022

US Share markets continue to rally on higher risk appetite, leading into the release of the all-important US CPI number, set to be released later tonight. The market expects the number to set a new 40 year record of 7.2%, but the market appears comfortable, as recent data has pointed to inflation peaking in the US economy. US Bond Yields have risen and look set to test the Big figure of 2%, in the 10 year yields. The Fed have been dragged kicking and screaming to interest rate rises and any signs that inflation is nearing the peak, will result in the Federal Reserve losing the will to fight the inflation war that is so inherently necessary. The rising risk appetite in markets has seen bond yields and the US Dollar stabilise, with the EUR trading 1.1420, while the GBP holds 1.3525.

Commodity currencies have been the beneficiaries of the market sentiment, with the AUD pushing up towards 0.7200, while the NZD look to regain 0.6700. All the markets are pointing to a softer inflation reading in the US, so any upset will have a marked impact on currencies, equities and bonds. All eyes remain on the US CPI number.