US Services PMI data beat expectations, only adding to the inflationary pressures perceived in the markets. The JOLTS report showed higher than expected job openings in the US market, suggesting a softer market and adding to questions over the important Non-Farm Payroll number, set to be released Friday. The Fed have been emboldened by a strong labour market, allowing leeway on the speed of rate cuts, but any dramatic deterioration in the labour market, may bring this strategy into question. The EU inflation rate jumped to 2.4%, following the spike in German inflation yesterday, but French data showed only a small increase. European inflation is back on the rise, as winter energy prices soar, following the Ukrainian decision to shut down gas supplies from Russia. The US Dollar regained some lost ground, as the EUR once again dipped below 1.0400, while the GBP traded around 1.2500.Commodity currencies consolidated, with the NZD pushing back towards 0.5650, while the AUD jumped back to 0.6250. The rise in energy prices have assisted commodity prices and supported the associated currencies, while local markets will be focused on Australian inflation data. This will be a key number for the RBA, who have been extremely reluctant to begin the rate cutting cycle, for fear of re-igniting inflation.
