The Middle East war extends and escalates, pushing oil prices higher and higher. Oil is charging towards US$90/barrel, with no relief in sight, heading towards a global energy crisis. If there is no resolution, or at least a ceasefire, then energy will drive an inflation crisis. Inflation has been contained up until now, with US and European inflation readings remaining subdued. This could change quickly and matter, as energy is the driver of the economy and inflation. The ECB meets to decide whether to raise interest rates tonight, but are expected to hold, to check Geo-Political developments. The US dollar was steady, with the EUR holding 1.1400, while the GBP traded 1.3370.Commodity currencies drifted off highs, with the NZD trading 0.5815, while the AUD surrendered 0.7000. Australian Unemployment numbers will be released today, with no surprises expected, while local markets will await Japanese inflation readings.
