From Marc to Market:
The uncertainty about the US-Iran fragile ceasefire, which President Trump has said is on “life support” is weighing on risk-taking appetites today. Brent and WTI are up over $3 and bonds and stocks have been sold. The US dollar is firmer against the G10 currencies but the Norwegian krone. Most emerging market currencies are lower. Ahead of the Xi-Trump meeting later this week, the PBOC continued to gradually lower the dollar’s reference rate. Treasury Secretary Bessent is in Tokyo, and the media reports he ‘understands” Japanese exchange rate policy. This is a far cry from having the Treasury Department use the Federal Reserve to check prices as it did in January. The dollar reached a new five-session high against the yen.
The US reports April CPI today. The headline rate is seen rising to around 3.7% from 3.3%. And as Warsh’s confirmation process continued to make progress, the swaps market has boosted the chances of a rate hike this year to around 31%, the highest since last March. Still, the other major central banks are expected to raise rates sooner and by more....
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