Oil prices surged through US$100p.b. over the weekend and caused Asian markets to panic, suffering huge losses on early equity market trading. Saudi Arabia announced increased supply through Red Sea ports and G7 considered a release from their emergency oil reserves. This calmed energy markets, allowing early equity losses to be partially reclaimed. Oil still trades around US$95pb and the situation needs to be resolved, as oil dependent Countries, will suffer long term damage, if the war drags on. The higher energy prices will fuel huge inflationary pressures, and this was reflected in the global bond markets, with yields spiking. The safety of the US Dollar remains, with the EUR trading below 1.1600, while the GBP holds under 1.3400.Commodity currencies gained some support to open the trading week, with the AUD surging back through 0.7000, while the NZD consolidates above 0.5900. The energy crises and the resulting inflationary pressures were the drivers of markets, with Chinese inflation spiking, restricting any expected Central Bank rate cuts.
