Oil prices tumbled overnight, plunging to US$96/barrel, after surging to above US$110/barrel! This was enough to light up US equity and bond markets, although Europe did not follow suit. French 10-year bond yields spiked above the key psychological 5% level, as chaos ensues. The US Dollar was steady, with the EUR consolidating above 1.1200, while the GBP headed towards 1.3400. The GBP was supported by stronger yields following the release of higher-than-expected inflation data (annualised up to 3.5%).Commodity currencies rallied, with the AUD surging through 0.7000, while the NZD approaches 0.5700. A lot of local attention will be focused on the quarterly NZ CPI numbers, set to be released today. Expectations are for inflation to retreat, from 4.1% to 3.8%, and if these expectations are not met, there will be action on the NZ currency markets.
