Markets were steady overnight, largely ignoring the impasse in the Middle East and rising oil prices. Oil jumped to US$93.50/barrel overnight, reflecting the withdrawal of Iran from the negotiating process. There is talk of a ceasefire in Lebanon and this may be part of the reason for market calm. EU inflation jumped to 3.2%, from 3%, adding pressure on the ECB to raise rates at their next meeting. The EUR was steady, holding above 1.1600, while the GBP traded around 1.3450.
Commodity currencies were treading water, with the NZD holding above 0.5900, while the AUD traded 0.7170. The Australian Current Account deficit blew out, once again, exaggerated by the big jump in imported energy costs and a big investment in data centre technology. Building massive data centres, in Australia, will add huge upward pressure to the electricity grid and prices.
