US equity markets showed signs of improvement, as the banking crises eases and bond yields settle. The US bond yield curve remains inverted, which indicates a looming recession, but short-dated yields have fallen below the Fed rate, pointing to rate cuts in the future. If the ‘inflation peak’ has been reached and the banking crises pours further pressure on the Fed, then they may be pressured into cutting rates later in the year? German Consumer Confidence is in the doldrums, coming in at minus 29.5, while markets await the much anticipated German inflation data, due out tonight. German inflation is forecast to tumble, from 8.7%, to 7.3%. This will confirm that inflation is headed in the right direction, although the ECB will remain hawkish, in an attempt to bring inflation into their desired range. The US dollar was steady, with the EUR holding above 1.0800, while the GBP trades around 1.2300.
Commodity currencies were slightly softer, with the AUD felling below 0.6700, while the NZD attempts to hold 0.6200. Local NZ markets await the important Business Confidence numbers, set to be released today, while global markets await German inflation data and Q4 US GDP growth numbers.