The war in the Middle East continues to dominate markets, as missile attacks from both sides destroy infrastructure and shipping, forcing the price of oil higher. Oil surged once again, despite the tapping of the US and IEA emergency reserves, as the Strait of Hormuz remains closed. The rhetoric from both sides remains aggressive, while the US foresee an early end to the crises. Massive spikes in energy prices will feed directly into global inflation, which will force higher interest rates and extreme recessionary economic conditions. Equities tumble and bond yields are surging, while the US Dollar gains ground for safety reasons. The EUR fell back to 1.1500, while the GBP lost ground, falling to 1.3340.The surging reserve took it’s toll on commodity currencies, with the AUD slipping back below 0.7100, while the NZD surrendered 0.5900. Economic data points are being largely ignored, as the Geo-Political crises overwhelms markets.
