US Bond yields stabilised overnight. Albeit at near record highs, allowing equity markets to also find some relief. The same cannot be said for the European bond yields, especially the French , which are pushing multi-year highs. A fiscal crisis has been brewing for some time in France, with a minority Government unable to address increasing fiscal pressures. This has only been accentuated, with the energy/inflation crisis and is reflected in their bond yields. The EUR is paying the price, slumping to 1.1220, while the GBP surrendered 1.3200.
The strong reserve has pummeled commodity currencies, with the AUD crashing to 0.6910, while the NZD looks set to fall below 0.5600. The energy/ inflation crisis, does not look to have any immediate solution, so market conditions will continue to deteriorate. US Non-Farm Payrolls (set to be released later tonight), are expected to be a positive for markets, as US economy copes a lot better than European, and other energy vulnerable economies.
