Daily Market Commentary 20th April 2022

US equity markets rallied strongly overnight, along with continued surging support for the mighty US Dollar. US 10 year Bond Yields continue to rise, blowing through 2.9%, as speculation that the Federal Reserve will raise rates by 50 basis points in the coming meeting, seems a mere formality. The rising interest rates have supported a big rally in the US Dollar, with the EUR crashing below 1.0800, while the GBP has crashed below the big figure of 1.3000.

Commodity prices have also drifted lower, boosting the impact on the associated currencies. The NZD crashed back towards 0.6700, while the AUD was unaffected by the hawkish RBA minutes, falling back to 0.7350. The RBA minutes were hawkish and hinted that the ‘rate raising cycle’, would commence, following the Federal Election.

Inflation remains the major concern that is driving interest rates and markets.