Global equities rebounded strongly overnight, ‘buying the dip’, following the record sell-off on share markets in the previous session. The trigger for the market crash was the spike in virus cases around the world, but the underlying inflation crises, could be far more durable. The US Dollar remained attractive, with the EUR falling below 1.1800, while the GBP crashed to 1.3615 as record virus cases dampen ‘Freedom Day’ celebrations.
The strong reserve and weaker Dairy Prices smashed the NZD, which fell below 0.6900 overnight, while the AUD drifted to 0.7320. The RBA minutes confirmed the Central bank would not consider any form of rate rise until inflation was in the desired target range. All eyes remain on the political lock-downs spreading across Australia, which continue to damage the previously recovering economy. German PPI rose to 8.5%, despite the lack of economic activity and confirming the global price pressures.
All eyes remain on the virus and attention will start to focus on tomorrows ECB rate decision.