Corpay Australia Market Update

What you need to know

Short and sweet today with the Fed looming.?Unless we see some major catalyst out of left field, Mr Powell will headline news tomorrow morning.?

Oil lower, gold lower, and Zelenkiy states Ukraine will not join NATO.?Ukrainian president’s statement comes as three EU leaders arrive in city to express solidarity amid heavy bombardment.

The RBA Minutes yesterday were to be expected.?Not a lot changed with a tendency to be patient.?In light of the war this seems more and more prudent, yet is inflation still transitory??The only real change to the minutes was the notable and obvious inclusion of uncertainty arising in Europe.?With a wait-and-see approach, the RBA needs to know if inflation is lingering longer.?It seems too early to tell with the global energy crisis is see-sawing back and forth.?

Oil took a nose dive yesterday on easing supply concerns and China’s Covid situation (hitting almost all provinces now).?Clearly the world’s second largest consumer of oil is denting demand and consequently prices.?Back below $100pb, Texas tea tried to bounce but longer term futures are biased lower for now.?Unfortunately, we all know how long lockdowns can last.?Much of the market is showing high implied volatility in the near term, easing later in the year.?This is an inverted curve to normal risk premiums, where longer dates typically see the enhance volatility.?While nothing is certain, this is a good guide to how the market feels these geopolitics will play out.