Fed left interest rates unchanged but suggest further hikes
Federal Reserve officials paused their series of interest-rate hikes but projected borrowing costs will go higher than previously expected.
Powell, speaking to reporters in a press conference Wednesday, faced the challenging task of explaining two possibly contradictory policies: deciding to leave rates unchanged following 10 straight hikes while also indicating that at least two more increases might be necessary this year, possibly as soon as July.
Source: Bloomberg
Federal Reserve to skip a rate hike
A gauge of dollar strength held near a one-month low on speculation the Federal Reserve will skip an interest-rate hike at a policy meeting ending Wednesday.
While US CPI data has cemented bets on a Fed pause, it also suggests that we might see more tightening later, which will ultimately slow the US economy.
Source: Bloomberg
Turkish Lira disastrous performance in one chart
Turkish Lira (blue) is down -55% in the last 10 years in real terms. That's worse than Sri Lanka (pink), which is down -27%, and worse than Pakistan (orange), which is down -8%. Chart also shows Brazil undervaluation. These are all commodity importers. Brazil doesn't belong here. Source: Robin Brooks
Attractiveness of EUR IG vs. US IG at decade high! 📈💼
🌍 Absolute yields in the global credit market present compelling long-term entry points, especially for high-quality European corporate bonds. Compared to the US market, the attractiveness of EUR Investment Grade (IG) credit is soaring. While concerns about a deeper recession in Europe have caused some turbulence, they have also opened up intriguing investment opportunities. Moreover, the recent Credit Suisse incident has further contributed to the dynamic landscape. 📊🔍 Is it time to seize the potential yield offered by EUR IG bonds? 💡💰 Source : Bloomberg
Bank of Canada raises key rate by 25 bps to 4.75% vs. 4.5% est.
The Bank of Canada defied expectations by restarting its interest-rate tightening campaign, saying the economy is running too hot.
Source: Bloomberg
Is it time to increase duration in EUR bonds?
The latest European Commission survey on Eurozone selling price expectations shows a significant decline, suggesting that inflation should continue to decrease in the coming months, alleviating pressure on the ECB to tighten its monetary policy. After a possible one or two final tightening moves by the ECB in June and/or July, is it worth considering a higher allocation to European rates, particularly core bonds? Source : Bloomberg.
Falling inflation expectations could allow Norges Bank to hike further
In the medium term, we observe that the EUR/NOK direction tends to follow relative consumer confidence between the Euro-area and Norway. In the current economic context, this indicator is linked to inflation pessimism, and the recent positive inflection in Norway could signal the end of FX losses. In a survey published this week, households in Norway now expect inflation at 4% in one year, from 6% one quarter ago.
Falling inflation expectations could allow Norges Bank to hike further, and importantly, the revival of consumer confidence could eventually help NOK to recover.
Source: FxStreet & Société Générale
EUR/USD resumes decline, approaches the 1.0900 level
EUR/USD has resumed its slide early in the American session and is on its way to challenging the 1.0900 figure. Risk aversion leads financial markets, with stocks in sell-off mode, hinting at further US Dollar gains.
Support levels: 1.0890 1.0830 1.0785
Resistance levels: 1.0955 1.1000 1.1050
Source: FxStreet
