Risk appetite ebbs back into markets, with equities grinding upwards, while Bond Yields are also on the rise. The inflationary number that hit markets overnight was the EU PPI, which is an all-out assault on inflation, inputs surging 37.2%! This number directly transforms into inflation and has been thoroughly ignored by the ECB, which has offered no action to combat rampant and destructive inflation. Rising US bond yields did little to support the US Dollar, with the EUR surging back to 1.0750, while the GBP rallied to 1.2590.
US Factory Orders were weak, as were Total Vehicle Sales, in the USA. The ADP Jobs report, set off alarm bells, with jobs added to the private sector much less than expected. Weaker consumer demand and jobs growth materialising in the all-important Non-Farm Payroll number, released Friday, would not be a positive for markets.
Commodity currencies continue to benefit strong commodity prices and a softer reserve enabled the AUD to surge to 0.7250, while the NZD rallied towards 0.6550. NZ Trade numbers were steady, reflecting surging prices in both imports and exports, while the Australian trade surplus extends with higher returns.