EU inflation data confirmed inflation remains stubbornly high, with Core holding at 5.5%, while headline numbers cooled slightly. The ECB have recognised this and would also have noted the insipid economic growth levels across the Economic Community, considering a halt to the recent series of rate rises. Attention will turn to the Bank of England, who make their latest monetary policy decision, this week. Inflation remains elevated in the UK and they are likely to raise rates, once again. The GBP remained steady, trading 1.2850 ahead of the Central Bank meeting, while the EUR clung to 1.1000. Attention will focus on the US labour market, with a series of important reports(including the Jolts, Challenger and ADP), culminating in the all-important Non-Farm Payrolls Friday. The Labour market in the US needs to ease before the Fed will end rate rises.
Japanese Industrial Production contracted, while Chinese Manufacturing PMI improved, but remains below 50, which is in contraction mode. Commodity prices staged a recovery and boosted the associated currencies, with the AUD jumping back above 0.6700, while the NZD looked to reclaim 0.6200. NZ Business Confidence came in at minus 13.1, which is an improvement, but remains heavily negative. Australian markets will be focused on the RBA and their latest interest rate decision, where they are expected to raise rates 25 basis points, although the political heat builds to end rate rises.
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