GBP/USD Drifting Continues

The week ended with mixed data out of the UK, and the British pound fell 0.80% but managed to recover and ended the Friday session unchanged. Retail sales fell by 3.1% y/y, matching the estimate and following  -3.5% in February. The core rate slipped 3.2%, below the estimate of -3.1% and the previous release of -3.0%. On a monthly basis, retail sales fell by 0.9%, as the unusually rainy weather kept shoppers away.

ECB Has No Other Choice But to Continue Inflation Battle

Wunsch added to recent hawkish comments from him and several other ECB figures, arguing that the ECB has no other choice but to continue its inflation battle as core (services) inflation and wage inflation show no sign of abating yet. He wouldn’t be surprised to see the key ECB policy rate reach 4%.

USD/JPY Dips Lower after BoJ Core CPI Rises

Inflation in Japan is much lower than what we’re seeing in other major economies, but nevertheless, inflation continues to be closely watched by the Bank of Japan. There has been speculation that the central bank will make a shift in policy, given that inflation is above 3%, above the target of 2%. Earlier today, BoJ Core CPI, the preferred inflation indicator of the central bank, climbed to 2.9% in March. This was higher than expected and above the 2.7% gain a month earlier.

Investors Eye US Data Later in the Week, Earnings Remain in Focus

Equity markets a slightly under pressure on Tuesday following a wide array of earnings releases and as investors eye further US data later in the week.

US GDP in Focus as Fed Prepares to Play its Final Card

There is a heavy load of US economic releases coming up this week. The highlight will be the latest GDP report on Thursday, which will help shape market expectations about the trajectory of interest rates as the Fed prepares to roll out the final rate increase of this cycle next week. As for the dollar, it has been on the ropes lately, but better days may lie ahead. 

Sunset Market Commentary

Markets First Republic Bank’s $100bn deposit outflow wacked sentiment at the end of US dealings yesterday as investors relived the turbulent March month. Asian and European trading today suffered from spillover effects with other, mixed earnings unable to provide directional guidance. Core bonds gain. German Bunds outperform relative to US Treasuries at the front end […]

Crypto Seeks Support

The cryptocurrency market is down 0.6% over the past 24 hours, falling to $1.15 trillion, as we see reduced volatility and attempts to “buy the bottom”.

AUD/USD Slips to 2-Week Low Ahead of CPI

AUD/USD is down almost 1% Australian CPI expected to drop to 6.6% UoM Consumer Sentiment falls, US New Home Sales jump The Australian dollar has plunged on Tuesday. AUD/USD is trading at 0.6632, down 0.95% on the day. The Aussie is under strong downward pressure, having lost around 1.7% since Thursday. Australian inflation expected to […]

Riksbank to Deliver 50bp Rate Hike Today

We expect the Riksbank to deliver a rate hike of 50bp bringing the policy rate to 3.50% and to signal an additional rate hike in June, somewhere between 25bp and 50bp. This view is well aligned with current market pricing, which indicates 50+30+15bp=95bp for three upcoming meetings. We still expect a final 50bp in June and a peak rate at 4.0%.

Greenback Tried to Bank on Safe Haven Status, But Didn't Really Shine

The greenback tried to bank on its safe haven status, but didn’t really shine. The US nature of yesterday’s market stress serves as strong counterweight. EUR/USD closed at 1.0973 after testing the YTD highs around 1.1070 early on. The tradeweighted dollar rebounded from 101.26 to 101.95.