US equities tumbled overnight, as recessionary fears remain elevated, following the last week of strong gains. Market await the testimony of Fed Chairman Powell, before Congress, which may give some further insight into the Fed’s monetary intentions. Markets did not react well to Chinese interest rates cuts, as growth forecasts are reviewed lower and economic stimulation is required. UK markets will be focused on tonight’s CPI inflation number and the impact this will have on the Bank of England rate decision tomorrow night. Currencies remained relatively steady, with the EUR holding above 1.0900, while the GBP trades around 1.2750.
The Chinese interest rate cuts were not a good look for the commodity currencies, with the NZD falling below 0.6150, while the AUD crashed to 0.6750. The RBA released their latest minutes and that triggered a big sell-off in the local currency. The minutes revealed strong fears that inflation was becoming entrenched in the Australian economy, requiring further aggressive interest rate rises.