Bearish Bets against the Japanese Yen reach highest level in 17 years
Source: Barchart, Bloomberg
SNB cut rates against market expectations
Swiss National Bank cut the policy rate by 25 BPS to 1.50%. USDCHF and EURCHF both jumped by more than one figure to 0.8970 and 0.9780 respectively. Market was only pricing in a 35% probability of this cut.
FED holds benchmark rate, May cut remains unlikely
The US Federal reserve holds benchmark rate in 5.25-5.5% target range. Jerome Powell prepared remarks and Q&A answers were more dovish than during the January meeting. FOMC median forecast remains at 75 BPS rate cuts for 2024, but the forecast increased from 3.6% to 3.9% in 2025.
Gold reacted to Powell's dovish tone by jumping to a new record high and breaking the 2200 level.
Source: Bloomberg
Nice one by Barclays...
The CNY's share of cross-border payments has overtaken the USD Source: Ronnie Stoeferle, Barclays, Bloomberg
Japan | Yen Gains With Bank Stocks as Wages, BOJ Remarks Boost Hike Bets – Bloomberg
The yen climbed to a one-month high and Japanese bank shares rose after wage data and a Bank of Japan board member’s remarks bolstered speculation the authority will raise interest rates this month. Japanese government bonds extended their drop as data from an auction of 30-year debt indicated weak investor demand for long-maturity securities ahead of the expected BOJ shift. Policy-sensitive two-year notes also fell, with their yield climbing to 0.195%, the highest level since 2011.
The Egyptian Pound is down 37% against the USD after switching to a flexible exchange rate
Source: Barchart
High global cost of capital hurts weak global balance sheets
Pakistan, Nigeria, Ethiopia, Egypt, DRC, Iran, Türkiye, Argentina account for 12% of world population (>1bn people) and they are all hit by inflation rates >30% (Argentina 250%, Türkiye 60%, DRC 50%), interest rates >20% & pressure of currencies. Source: BofA
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