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Markets:
- WTI crude oil up 96-cents to $72.79
- Gold up $6 to $1946
- US 10-year yields flat at 3.81%
- S&P 500 up 1.4%
- GBP leads, JPY lags
The percentages of a June Fed hike have risen to 70% from 50% immediately and that tells the story in FX, with the greenback gaining, although not precisely in an easy means. Each the pricing numbers and the consumption numbers had been sizzling within the PCE information and the massive winner was USD/JPY, which hit a brand new excessive for the yr.
Initially it was a broad USD rally nevertheless it was extra back-and-forth later because the market additionally weighed the stronger financial prospects. Flows into US tech are additionally a seemingly-unstoppable pressure as effectively, with the Nasdaq gaining one other 2.2% on the AI growth.
The pound managed to carry off the US greenback however fell 90 pips from its highs earlier than bouncing late.
Monday is a vacation within the US so there was some place squaring into the weekend, notably in bonds as longs did not wish to be caught offside on a debt ceiling deal and a wave of Treasury issuance. Yellen pushed again the deadline to a minimum of June 5, so the charade might go on for one more week.
The larger story although is that the greenback seems to be breaking out on plenty of fronts and there is no US weak spot but within the information. Will subsequent Friday’s non-farm payrolls report change that? Tune in to search out out.
Have a very good (lengthy) weekend.
For these within the UK and US.
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