Confidence returned to markets, when they opened Monday following the big sell-off Friday, triggered by the Israel/Iran attacks. The new front opened by Israel in the Middle East, was sudden, massive and not unexpected. There are hopes of containment and this was the reason for the rebound in equities and currencies. Global equities recovered some lost ground, while oil prices settled, albeit at elevated levels. The US Dollar retreated, with the EUR heading back towards 1.1600, while the GBP approaches 1.3600.The reserve was also softer allowing for a recovery in commodity currencies, with the AUD reclaiming 0.6500, while the NZD broke back above 0.6050. Local markets will be looking closely at the Bank of Japan today, expected to leave rates unchanged, despite worrying inflation levels. Geo-Political events remain the elephant in the room.
