European and US markets attempted to consolidate positions, following the almost apocalyptic crises in the Middle East, which has been unravelling global markets. Asian markets followed overnight US markets, deep into the abyss, with the South Korean Kospi haemorrhaging more than 15% for the week. Many of these Asian markets are heavily dependent on energy supply and pricing. Iran’s closure of the Straits of Hormuz, is a huge blow to energy dependent nations, and Trump intervened to mitigate this calamity. Trump proposed US backing of shipping insurance and perhaps escorting tankers with US war ships. This eased tensions overnight and markets settled, at least until the next catastrophe. The US Dollar eased, with the EUR regaining 1.1600, while the GBP consolidated above 1.3350.Asian markets are under extreme pressure, and the energy crises must be solved, to correct this crippling blow to markets. Chinese Manufacturing showed a further contraction, via PMI readings. Commodity currencies attempted to stabilise, with the AUD breaking back above 0.7050, while the NZD surged back through 0.5900. NZ Trade data was extremely positive, with big improvements in the ‘Terms of Trade’ and a surge in exports. Australian GDP growth also confirmed a bigger than expected jump, climbing to an annualised 2.6%. This number is driven by massive Government spending, although export income increases have contributed and mass immigration has also flattered the number.
