Elevated bond yields in Europe and the US, have weighed heavily on equity markets and attracted safety moves towards the US Dollar. Fears over inflation have sparked carnage in bond markets and this is directly impacting equities. The energy crisis is increasing in velocity, with diesel supplies surging prices, across the globe. Diesel is the life blood of world economies and the wars in the Middle East and Europe, are taking supply to critical levels. The flight to safety has seen the US Dollar surge, with the EUR tumbling to 1.1315, while the GBP slumped to 1.3200.The inflation wave engulfing Western economies has not ignored Australia and New Zealand. The RBA recognised this yesterday and raised rates to 4.6%, the highest since 2011. This is making life in Australia extremely tough, for both business and the average punter, suffering increased burden. The increase in interest rates did nothing to attract investors, as the AUD plummeted to 0.6980, surrendering the important 0.7000 level, while the NZD crashed to 0.5640. Energy, inflation and interest rates continue dominate markets.
