Markets closed out a tumultuous week on a softer note, but with equities trading at near record highs, shaken by the Geo-Political threats arising across the globe. The Coup/Martial Law Declaration in South Korea, is rapidly turning into an impeachment/overthrow, of the current President. The Macron appointed Government was disposed of by the Parliament and now Macron himself, is under immense pressure. The war in the Ukraine rages on, while the Middle East war has spread to Syria. All of these events are connected hot spots. This coming week has a focus on Central Banks and rate decisions. The RBA, Bank of Canada, Swiss National Bank and the ECB all make Interest Rate Decisions. All but the RBA are expected to make rate cuts, in an effort to stimulate insipid growth. The EUR traded 1.0550, ahead of the ECB IRD, while the GBP held above 1.2700.The RBA will look to hold interest rates at elevated levels to squeeze inflation out of the economy, while important employment numbers will also be released, this coming week. Then RBA have held rates, while most others have cut, as inflation still remains a threat. Despite the support from elevated interest rates and favourable differentials, the AUD has tumbled. Commodity prices are weak, and the economy is suffering extreme hardship. The NZD has held up relatively better, despite the RBNZ slashing interest rates. The contrast should not be ignored. The AUD crashed below 0.6400, ahead of the RBA IRD, while the NZD fell back towards 0.5800.
