Topic: Weekly FX Report
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Risk-on fades as US jobs above all forecast
Equity benchmarks in the US and Europe hit record highs before the non-farm report. The surprising 272k job increase reversed US treasury yield declines and reduced rate cut expectations.
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Big week for Europe as US yields rise
Europe faces a challenging week as rising US bond yields increase market volatility. The Stoxx 600 fell for a second week, pressured by these yields. Meanwhile, the EU must decide on imposing tariffs on Chinese electric vehicles, adding to geopolitical tensions.
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Fed cuts less likely as US remains exceptional
The US dollar rebounded from six-week lows with strong economic data. The British pound rose after UK PM Rishi Sunak called a snap election. NZD/USD spiked briefly on RBNZ’s rate hike signal.
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Equities at record highs as US inflation descends
US consumer prices fell unexpectedly in April, while import prices surged by 0.9%. Retail sales and industrial production stagnated, signaling a slower Q2 start. German investor sentiment hit a high, and China’s recovery remains manufacturing-driven. The US dollar weakened despite hawkish Fed comments.
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Rise in US jobless claims overshadows dovish BoE
A strong earnings season and soft US data, supporting the case for interest rate cuts, gave investors the green light to switch into a risk-on mode. Pro-cyclical currencies cheered.
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Powell trumps inflation, weakening the dollar
In a tumultuous week, the yen surged with suspected Japanese intervention, while the US dollar faltered on a dovish Fed and a colder-than-expected US jobs report. Rate cut speculation returns ahead of the upcoming Bank of England meeting.