Markets closed out a very volatile week of trading, highlighted by surging bond yields, sending warning signals to markets. US and European bond yields tested highs, as the energy/inflation crisis rolls on, with spiking prices in diesel due to global supply shortages. This has hit European bonds particularly hard, especially the French bonds, which appear to have a ‘perfect storm’ brewing. Political chaos, bond market disruption and budgetary crisis. This has sent the EUR below 1.1200, in seemingly in trouble, while the GBP consolidates above 1.3200.The safety of the reserve currency has also damaged commodity currencies, with the AUD falling earlier in the week, although recovering at the close Friday to 0.6980. The NZD struggled to hold 0.5600, all week, but closed just above the key mark. The coming week, will focus on the energy crisis and the impact on inflation, with important readings from Europe and the US.
