USD IN PRIME POSITION TO REMAIN FIRM IN THE NEAR TERM – SCOTIABANK
The US Dollar is trading a bit more mixed as the dust settles after Tuesday’s US Consumer Price Index (CPI) shocker. Economists at Scotiabank analyze Greenback’s outlook.
Upside potential for US terms yields is probably limited
Developments this week leave the USD in prime position to remain firm in the near term; slow progress on inflation supports the idea of ‘high for longer’ rates in the US but high is not higher; that should mean that upside potential for US terms yields is probably limited.
Bargain hunters may be sniffing around US bonds while markets still view June as the likely jump-off point for Fed easing (26 bps of cuts priced in via OIS at present).
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