Rate Cuts Begin

Last week we saw the first of potentially more rate cuts as both the BoC and ECB cut rates by 25bps. I know our reports have been looking at rate cuts being pushed deeper and deeper into 2024 and the NFP number last week seemed to continue its signal of higher for longer.

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Rate Cuts Looking Deferred

Last week the markets were influenced by impending rate cuts or lack of. GBP regained the 1.27 level as any imminent rate cuts seem to have been pushed back from June to the earliest August. This was substantiated by the most recent inflationary numbers coupled with the unexpected election in July.

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Risk-on continues its trend

Last week we saw a return to a risk-on environment. The US Inflation report muted any calls for US interest rates to move higher leading to an equity rally and risk-on currency move.

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BoJ Intervenes to Shore Up Yen

Last week we saw a reversal of the dollar strength which saw once again market expectations of 2 or more rate cuts in 2024 back on the table. With disappointing job numbers and a less hawkish than expected Powel the dollar tumbled away its gains and stock markets were buoyed.

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Yen Collapse; FOMC in Focus

Last week we saw the expected de-escalation in the Iran – Israel war and a risk on rally ensued. The Yen had sharp sell off. Firstly, the BoJ kept rates unchanged, and a dovish tone then compounded the fall closing the week through 158.

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Inflationary Pressure Resurfaces

Last week the US Dollar remained in a tight range as other geopolitical news took the fore. Oil prices surged along with metals such as Copper reigniting inflationary warning signs which could leave central banks powerless to reduce rates in the coming months.

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Quiet Markets with a Shorter Week

Last week the markets failed to break out in any direction. With the shorter week for Easter and lack of economic data we ended the week broadly where we started. Dollar tried to continue its trajectory higher but failed to show any real move by the end of the week US Data came in mixed…

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