Market volatility continued into the new week, with fears over the Ukrainian situation and rampant US inflation, dominating the narrative. The US and UK are beating the war drums over the Ukraine, which has made markets very nervous, while all European participants deny any imminent threat. US inflation surged to 7.5%, which is part of the reason the US is stoking Geo-Political fires, while growth remains challenged. The EUR drifted back to trade 1.1300, while the GBP slipped to 1.3520, ahead of key local employment data.
Commodity currencies also suffered a resurgent reserve, boosted by soaring Bond Yields and the flight to safety. The AUD fell below 0.7100, but later recovered, while the NZD tests 0.6600. NZ is experiencing surging omicron cases at present, despite the desperate attempts to hold fortress New Zealand and deny the inevitable. The harsh restrictions NZ faces, will continue to wreak economic and social pain over the country that has been suffering for more than 2 years. Local markets will focus on this and Australia will look closely at the RBA minutes, for signs of a reversal in monetary policy.