Today's session has not been particularly favorable for the euro. Recent EUR/USD price action shows a decline of approximately 0.2% in favor of the U.S. dollar, a move largely driven by the release of the U.S. PCE inflation report and the recent recovery seen in the bond market.
The US dollar moved against its recent macro playbook on Monday. AUD/USD paid the price, although bulls still hold the upper hand.
EUR/USD flashes reversal signals after a powerful move higher, just as markets wait for Scott Bessent to provide more detail on how he plans to take pressure off the long end of the US curve.
A $40 trillion debt pile, rising interest costs and a more interventionist Treasury are giving dollar bears something to think about. EUR/USD sits at the centre of that debate.
The US dollar was hammered after Treasury moved to support longer-dated bonds, sending gold and silver sharply higher. It may be premature to declare the debasement trade back, but the embers are glowing.
It's rare to see macro, rates and technicals align this cleanly. That's exactly what's happening for the US dollar heading into next week's FOMC meeting.
Japanese assets are rallying after the government floated the prospect of the GPIF investing more heavily at home. While the proposal could have significant implications for global capital flows, it does not yet change the broader forces driving Japanese bond yields and USD/JPY.
Australian jobs data will set the tone for the Aussie dollar and RBA rate outlook today. With AUD/USD sitting on its bullish uptrend and markets still pricing a chance of another hike, there's plenty riding on the outcome.
BOJ day has arrived, but the rate decision itself may be the least interesting part of it. With markets focused on guidance and QT, the yen faces another important test.
The trading week is coming to an end, and although gold has tried to recover in the short term, the move still looks insufficient against the selling pressure that has remained in place over the past few weeks. Over the last five trading sessions, gold is still down close to -3.00%.
A BOJ rate hike next week is priced. The bigger question is whether it chooses to save the bond market or the yen.
Bond markets make the financial world go round, helping to grease the wheels of commerce, allowing the economy activity to expand. But when too much debt is issued, it can overwhelm demand, causing borrowing costs to spike which can be detrimental to the economy.
Markets were directionless in morning trade as traders ponder what the Federal Reserve might say tomorrow and monitor upcoming jobs data, headlines from the Middle East, and underwhelming earnings reports. We highlight some spooky academic research on All Hallows' Eve (the evening before All Hallows' Day). Bottom line: Risk-on (if you dare!)
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