US Markets were closed for the Memorial Day Holiday, while European markets booked gains, despite further inflation worries. German Inflation rose to 8.7%, much higher than expected, destroying the ‘peak inflation’ theory. Spanish inflation also blew through expectations, coming in around 8.7%, while PPI numbers spiralled in Italy and Austria. Swedish GDP turned negative, as inflation and cost-of-living hikes hit the consumer and European economies slip into recession. There was little action in the currency markets, with the US closed, with the EUR trading 1.0780, while the GBP held around 1.2650.
Commodity currencies continued to benefit strong prices and a softer reserve, as the AUD pushes up towards 0.7200, while the NZD looks to regain 0.6550. NZ Business Confidence is a key data measure and that may impact markets in quiet domestic trade, while Building Permit numbers are released on both sides of the Tasman. Soaring building costs are hitting the leading sector hard, with many company liquidations coming in tough Australian conditions, fighting soaring building and labour costs.
Markets will focus on the re-open, after the extended long weekend in the US and whether the relief rally in equities can continue?