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CNY

Calm After the Storm Brings Currency Volatility Down

Treasury yields are stabilising and the dollar is recovering ground after losing a little altitude during yesterday’s session when a closely-watched input cost index climbed by less than expected. The producer price index for final demand rose just 0.2 percent month-over-month in March, with a third consecutive increase in services costs obscuring a cooling in many of the components that go into the Fed’s preferred inflation indicator. Taken in combination with Wednesday’s consumer price print, the data suggest that the personal consumption expenditures index will rise somewhere between 0.2 and 0.3 percent on a month-over-month basis when the next update...

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Dollar Pushes Higher Ahead of Economically-Eventful Week

The dollar is trading with a firmer bias ahead of a week filled with first-tier economic events, and after Friday’s forecast-crushing US jobs number triggered a pop in Treasury yields. Both the pound and euro are starting the week on the back foot, weakened by expectations of earlier rate cuts from the Bank of England and European Central Bank, while the Japanese yen remains hemmed in by short sellers on one side and the threat of intervention on the other. Global oil benchmarks are losing altitude after Israel said it would withdraw some troops from Gaza, reducing perceived geopolitical risk...

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Caution Prevails as First Quarter Winds Down

Financial markets remain broadly rangebound this morning as month- and quarter-end position squaring drives investors to cut risk. The dollar is essentially unchanged, Treasury yields and crude prices are softening, and North American equity bourses are setting up for a weaker open. More evidence of strength in the US economy was delivered yesterday. Data releases showed home prices climbing at the fastest annual pace since 2022 in January, durable goods orders rising more than expected in February, and the Conference Board’s measure of consumer confidence ticking higher in March. The “no-landing” consensus among economists keeps growing more pervasive, bolstered by...

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Holding firm

• Limited moves. Equities mixed, bond yields drifted back, & the USD is little changed. AUD is close to where it was this time yesterday.• Low vol. Measures of equity & FX volatility are now well below average. Markets could be complacent to the macro & geopolitical risks still lurking.• AU CPI. The monthly CPI indicator due today. More info on services is provided. We think inflation could re-accelerate by more than expected. Limited moves across markets overnight with not much new information coming through to shift the dial. In contrast to the small rise across European equities US stocks...

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Waiting game

• Quiet start. Global equities mixed. Bond yields drifted higher. USD a little softer. AUD has clawed back a bit of ground over the past 24hrs.• CNH & JPY. Authorities in China have pushed back on recent CNH weakness. Rhetoric from Japanese officials about JPY weakness has also ramped up.• Data flow. US durable goods orders in focus tonight. Locally, the monthly CPI indicator is due tomorrow & retail sales are released on Thursday. It has been a typically quiet start to the holiday shortened week with limited new news over the past 24hrs. Most of the major global equity...

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