Oil rose, gold fell, metals fell and the Dow rallied 45 points in what was a very muddled session last night.
ANZ is expecting inflation to hit 5% in Australia, the Aussie to pass through US dollar parity, and the RBA to increase the cash rate not once, but twice, in 2008.
Oil fell over US$3 last night on profit-taking, sending the Dow up 68 points.
With the US and UK closed, there were no major movements in Europe or elsewhere last night.
Oil rose once more and the Dow fell 145 points as the housing slump suddenly became important again.
If the Aussie is really heading to parity, get ready for some significant profit downgrades from exporters and companies deriving a large percentage of profits in the US.
It was not quite a major reversal, but oil fell back to US$130 last night allowing a thinly-traded Dow to gain 24 points.
The Dow fell another 200 points last night as oil hit US$134 and the Fed signalled it would not be cutting rates any further.
Unlike the US and British banks, European banks have been deathly quiet about their balance sheets. And a European economic downturn appears inevitable.
Soaring oil and subsequently rising inflation finally took its toll on Wall Street last night. The Dow fell 200 points.