US and European equity markets shrugged off flagging peace negotiations in the Middle East and traded around record highs. Trump rejected the Iranian counteroffer, calling them ‘totally unacceptable’ and warned the ceasefire was ‘on life support’. Markets brushed off these latest developments, but oil prices spiked back towards US$100/b, while bond yields are flashing warning signals. A flow of inflation and growth data will be coming from Europe and the US and is expected to reflect the energy crises. Chinese inflation data, released earlier, confirmed a big spike in CPI and PPI. The EUR traded above 1.1750, while the GBP held above 1.3600, awaiting the political fallout the Government faces following the trouncing they suffered in local elections.Commodity currencies were stable, with the AUD trading around 0.7250, while the NZD holds above 0.5950. Geo-Political crises will be the major caveat to markets, in the week ahead, while the impact on inflation will be directional.
