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4 days ago | 
think.ing.com | James Knightley |Francesco Pesole
Still strong case for cuts In what was likely a very close decision, the Bank of Canada opted to keep its policy rate at 2.75%. The market had favoured such an outcome, but economists were, in general, looking at a cut, certainly up until last week’s GDP numbers.
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4 days ago | 
think.ing.com | Francesco Pesole |František Táborský |Chris Turner
USD: Dollar rebounds, trade and ISM in focus The dollar showed resilience despite the late-session bounce in Treasury yields, supported by strong April JOLTS job openings. That said, the JOLTS data adds little to the overall jobs picture: the labour market remains tight, while declining quits suggest wage growth is easing.
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5 days ago | 
think.ing.com | František Táborský |Francesco Pesole |Chris Turner
USD: Strategic USD shorts quickly re-emerge The dollar’s slide accelerated at the start of the week, driven by two main factors: growing trade uncertainty and rising concerns from bond vigilantes over the US deficit. Yesterday’s ISM manufacturing surveys delivered a negative surprise, reversing the recent trend of resilient US data.
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6 days ago | 
think.ing.com | Chris Turner |František Táborský |Francesco Pesole
Global equity markets and the dollar start the week a little softer as trade tensions between the US and China start to reappear. It's not quite fair to say that the US-China trade deal reached in Geneva last month is unravelling, but both sides clearly seem frustrated. Social media posts from US President Donald Trump on Friday and comments made in the Chinese state media today both express frustration that trade commitments have not been adhered to.
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6 days ago | 
think.ing.com | James Knightley |Francesco Pesole
The Bank of Canada decision on 4 June is an incredibly close call. Unemployment is in danger of breaching 7% in the upcoming jobs report, but despite a low headline inflation print, core CPI has been moving higher again.
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1 week ago | 
think.ing.com | Chris Turner |František Táborský |Francesco Pesole
USD: April spending and inflation data in focus Yesterday's dollar rally didn't last long. It quickly became clear that the Trump administration would pursue other trade laws to enact its tariffs, and later, the US Court of Appeals proposed a delay in the original court ruling that tariffs were illegal. The suggestion now is that a further presentation of evidence could last up until 9 June in the appeals court. What weighed on the dollar more yesterday seemed to be the US macro data.
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1 week ago | 
think.ing.com | Chris Turner |Francesco Pesole |František Táborský
FX markets should focus on two themes today: the US Court of International Trade ruling that the majority of President Trump's tariffs are illegal, and insights from the minutes of the 7 May FOMC meeting, which suggest that dollar selling in April was driven by hedging rather than outright sales of US assets. On the former, the dollar has rallied around 0.5/0.7% in Asia on the view that Trump may be more constrained in his trade war.
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1 week ago | 
think.ing.com | Francesco Pesole |František Táborský |Chris Turner
Yesterday, we noted that the dollar needed some positive data surprises to regain firmer footing, and May’s consumer confidence figures delivered. The index rebounded sharply to 98.0 from April’s 86, well above the 87 consensus, offering a tentative signal that the US-China deal – and, even more so, the equity rebound – have helped reassure US consumers. The Dallas Fed manufacturing index also surprised to the upside, adding to the more favourable outlook for the dollar.
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1 week ago | 
think.ing.com | Francesco Pesole |Chris Turner |František Táborský
We shouldn’t be surprised to see the dollar softer at the start of the week, even with US President Donald Trump reversing course on 50% EU tariffs. It’s not a case of the greenback suddenly rediscovering its safe-haven status – by most measures, it hasn’t – but more a reflection that markets had largely filed tariffs under “April risks”. The focus for May and beyond was supposed to be on trade deals.
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2 weeks ago | 
think.ing.com | Chris Turner |Francesco Pesole |František Táborský
Earlier this week, we speculated over the low probability, high impact event of a change in FX language in this week's closing statement from the G7 meeting of Finance Ministers and Central Bank governors in Canada.
