A quiet start to the week on markets, although the ‘canary in the mineshaft’, is tweeting. US 10 year Bond Yields have spiked to 1.5% in the last couple of trading days. The markets have not received the memo from Central Banks across the world, regarding the transitory nature of inflation? ECB President, LeGarde, recognised that inflation is a problem in the ECB and around the world. She reiterated the narrative that it was temporary, but once you have got the dreaded ‘I’, it is not easy to conquer. The spike in Bond Yields has given the US Dollar some backbone, with the EUR falling below 1.1700, while the Yen moved towards 111.00.
Commodity prices remain bid and the associated currencies battle cross winds, with the rising reserve. The AUD looks set to regain 0.7300, despite the mess the economy is in, while the NZD attempts to crash back below 0.7000. Inflation and growth remain key data indicators in a troubled world economy.