The DOW surged to record highs, while oil prices fell back to US$92.50/barrel, as confidence returns to markets. Iran attacked Kuwait’s International Airport, and the US struck Iranian ‘defensive’ targets, although the US seems reluctant to return to a full-scale war. Bond yields drifted lower, the safety of the US Dollar weakened, as market sentiment improved. The EUR regained 1.1600, while the GBP consolidated above 1.3400.
Commodity currencies took advantage of the softer reserve initially, with the NZD bouncing to 0.5880, while the AUD headed back towards 0.7150. Since then, they have both retreated to yesterday's levels. The Yen is toying with 160.00, with rumours swirling of a Bank of Japan intervention in the offing. Markets are now looking toward tonight’s Non-Farm Payroll number.
