Social upheaval in China, due to the continued and draconian ‘Covid-lockdowns’, shook markets and deepened the prospect of a global recession. Oil prices continued to tumble, trading down to USD$76/barrel, demand pushing prices lower. The positive in this scenario, is that one of the major drivers of inflation, energy prices, are finally easing. This is timely, as the Northern Winter arrives, although gas supplies remain severely restrictive. US markets reopened after the long-Thanksgiving weekend and looked to evaluate the state of the Consumer following Black Friday/Cyber Monday sales. They looked to be softer, as expected, in the current economic environment. The US Dollar was steady, with the EUR trading 1.0370, while the GBP held above 1.2000.
Commodity currencies are beginning to feel the impact of sluggish commodity demand, although the weaker reserve, supported the currencies. The NZD looked to hold 0.6200, while Australian retail Sales dampened enthusiasm, with the AUD falling back below 0.6700. Markets will focus European inflation and growth data, to be released later in the day, to gauge Central Bank policy.