Markets are again focused on inflation and growth. The US January CPI number will be released Thursday and is expected to once again break records, hitting 7.2%. This will ensure that the Fed implements the intended tightening of monetary policy, both raising rates and cutting QE. The upward momentum has been reflected in the US Bond market, with 10 year Bond Yields rising 1.92%. The EUR drifted back to 1.1430, unimpressed with a further contraction in German Industrial Production, while the GBP held above 1.3500.
Iron ore prices are surging globally, which helped drive the AUD back above 0.7100, while the NZD struggles to hold 0.6600. Australian Retail Sales contracted 4.4%, as the economy attempts to get through the omicron surge and re-open. The markets are clearly focused on inflation at present and CPI/PPI numbers, across the globe, stir reaction.