US equity markets paused after hitting record highs in the previous day’s trade. The Down slipped back below 38,000, after breaking above the mark, for the first time in history. US and European bond yields continued to push higher, an indication markets are expecting inflation to reemerge, as a problem in early 2024. The Bank of Japan left rates unchanged, as expected, with no changes to monetary policy. Attention now turns to the ECB, Norges Bank and the Bank of Canada. Markets will also be eagerly awaiting US GDP growth data and the all-important PCE inflation numbers. The US Dollar rallied on the back of rising bond yields, with the EUR slipping to 1.0820, while the GBP fell to 1.2650.
The rising reserve tamed the commodity currencies, with the AUD falling to 0.6550, while the NZD dropped to 0.6070. NZ markets keenly await todays quarterly CPI numbers, which will impact the currency direction and interest rates. Australian and Japanese flash PMI data will also be watched closely, as will European and US PMI data, later tonight.