Equity markets traded at record levels, fuelled by the extremely generous QE policies being pursued by Central banks and the record low interest rates. The only danger to the cycle of deficit and debt is inflation. This week will reveal some dark secrets around inflation, through the release of CPI and PPI numbers, globally. Japan PPI was around 5%, which is low, but not for a stagnant low growth economy. US markets will be heavily focused on inflation and Fed Chair Powell, who testifies before Congress. The Dollar remains bid, with the EUR trading 1.1850, while the GBP pushed up to 1.3870.
NZ Credit Card spending was weak and Australian Building Permits contracted 7.1%. The NZ food inflation number will be released today, to give some flavour of want is to come. The NZD drifted to 0.6960, while the AUD fell back to 0.7460, awaiting a data push. The Australian economy remains challenged by various restrictions due to surging virus fears.