US bond yields spiked higher overnight, as inflationary pressures came under the spotlight and speculation that the Fed will raise rates once again to compensate. The rise in bond yields, back towards record levels, adds pressure to borrowers and servicing. The surge in bond yields hit equities, which drifted off record highs, while oil prices continued to tumble. Oil prices fell back, heading to US$90/barrel, amidst the UN meetings and negotiations. US PMI data shot up, allowing economic space for the Fed to raise rates further. The US Dollar gained ground, with the EUR falling back to 1.1370, while the GBP slumped to 1.3220.The rising reserve hit commodity currencies hard, with the AUD crashing to 0.7030, while the NZD fell to 0.5670. The safety of the reserve has added pressure to these vulnerable currencies, under pressure from the energy/inflation crisis. Local markets will be watching Australian Employment data today and Japanese PMI numbers.
