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
Is the Bank of Japan losing control of its bond market?
The Japanese yen soared overnight after Japan's Yomiuri reported that the BoJ is to review the side effects of its massive monetary easing at its policy meeting next week and may take additional steps to correct distortions in the yield curve, i.e there is a chance the BOJ will once again "surprise" the market with yet another Yield Curve Control tweak. JGB 10y has penetrated the 0.50% cap, reaching 0.568%. The USDJPY had tumbled as low as 128.66 from 132 yesterday, before bouncing modestly just above 129. Source: www.zerohedge.com, Bloomberg
A death cross is looming on the dollar
The dollar continued sliding today, now at its lowest since June 2022 (and a death cross is looming). Source: Bloomberg, www.zerohedge.com
Hedge Funds ramp up dollar shorts on bets for slower Fed hikes
Source: Bloomberg
China’s Cascade of Economic Support Measures Spurs Yuan Buying
Bloomberg
