Weekend briefing: The fog of war settles into financial pricing
Global financial markets are reacting to a rising US dollar and geopolitical instability in the Middle East. Economic analysts note that trade balances and commodity prices are being heavily influenced by these ongoing conflicts.
Why it matters
The volatility in the Middle East and US monetary policy are creating significant 'fog' in global pricing, impacting trade and inflation for nations like New Zealand.
Here's our summary of key economic events overnight that affect New Zealand, with news that although the US is on holiday, their currency is rising which pushes many others into a 'brutal' retreat. Because most trade is priced in USD (even if it is settled in other currencies) this matters a lot. Hawkish signals from the Warsh Fed that the US policy rate is more likely to rise soon, along with "flight to [perceived] safety" capital movements, especially out of the Middle East and based on the mess being left behind there, are two key drivers.
The article provides an economic analysis of global events, though it includes some critical commentary on US political figures.
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