Market turmoil resumed overnight, following an apparent end to the ceasefire in the Middle East. Trump announced in Turkey, at the NATO meeting, the ceasefire with Iran was over. This follows further attacks by Iran, on shipping in the Straits of Hormuz, while Trump promises massive retaliation. Oil prices surged, as did bond yields, while the equity markets were hammered. Déjà vu for markets. Expect volatility in the safety of the US Dollar, although the EUR held 1.1425, while the GBP traded around 1.3400.
Commodity currencies were steady, with the AUD trading above 0.6900, while the NZD trades around 0.5700. The RBNZ raised rates by 25 basis points, at their meeting yesterday, citing inflationary concerns. This was the opposite to the Fed, who held fast at their last meeting, despite misgivings within the Board. The RBNZ not holding the line, has the potential to make domestic economic conditions more difficult.
