Markets are stabilising, with equities building into some positive territory and bond yields settling. The price of oil remains elevated, trading around US$95pb, as markets begin to accept the situation. Attention will turn to Central Bank monetary policy, with the Fed, Bank of England and ECB all making decisions this week. All are expected to hold rates, as inflationary pressures rise, from the huge spike in energy prices. The US Dollar has also settled back lower, with the EUR trading 1.1530, while the GBP consolidates above 1.3300.The RBA decided to use the crises as cover and raise rates 25 basis points, pointing to the Middle East crises as the trigger for higher inflation. Inflation was surging back in Australia before the energy crises, and the RBA would probably have raised rates anyway. This was expected by markets, but the AUD still climbed back to 0.7100, while the NZD regained 0.5850.
