The fall-out from the collapse in US equity markets Friday, reverberated through Asian and European markets, to open the new trading week. The war in the Ukraine and the sanctions backfiring on European economies are driving negativity through markets. The European energy crises is smashing cost-of-living and production input costs, throughout the European markets and inflation is running rampant. Macron was re-elected in France, preserving some status-quo, but is that a positive? It is the largesse of current political fiscal incompetence, green energy policies and Central Bank reluctance to address the inflation issues, that has caused the crises. The Ukraine war and the sanctions imposed on Russia, have backfired and are only hurting the European economies further. Inflation has forced action from the Federal Reserve and this has lead to higher US interest rates and a stronger dollar. The EUR has crashed to 1.0700, while the GBP has collapsed to trade 1.2730, despite the Bank of England raising rates.
The new wave of COVID in China and the elimination strategy employed by the CCP, has lead to massive lockdowns and this is leading to fears over commodity demand, which is smashing the associated currencies. The AUD has been in freefall, plunging below 0.7150, while the NZD has dropped below 0.6600.
Inflation CPI and PPI are the key data releases impacting markets, while Geo-Political concerns in Europe and Asia, remain potential game-changers.