Market pricing for F...from Seagull EA

Market pricing for Fed cuts in 2024 has stabilised around 45bp after last week's events (FOMC and payrolls) and has so far been rather unresponsive to post-meeting FOMC members’ remarks. The dollar is – for once – not being influenced much by domestic drivers and may face further stabilisation in the coming days. There are some further upside risks for DXY as JPY remains under pressure and a rate cut in Sweden this morning (more in the SEK section below) may soften demand for European currencies.

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欧元：1.07-1.08 看起来是欧元/美元区间周五，美国就业数据略逊于预期，欧元/美元大幅上扬。然而，除非美国失业率出现 “有意义 ”的上升，否则决定美联储和美元下一步走势的将是美国物价而非就业活动数据。因此，下周的美国 4 月 CPI 数据可能会成为全球外汇汇率的下一个重要推动因素。在此之前，欧元区的日程表还算轻松，2024 年欧洲央行宽松周期的定价为 75 个基点--我们也是这么认为的。正如我们之前提到的，我们认为 1.08 代表了欧元/美元的中期合理价值--这可能意味着欧元/美元本周大部分时间可以在 1.07-1.08 的区间内交投。欧系货币面临的一个下行风险来自明天的瑞典央行政策会议。尽管担心货币走软，但我们认为瑞典央行仍将减息。正如我们在瑞士国家银行 3 月份降息时看到的那样，欧洲降息确实会加剧分歧，并导致欧洲货币表现不佳。这是明天的一个事件风险。

Seagull EA

USD: Softer NFP not enough to turn the dollar trend It looks like Friday's slightly softer US jobs report has been enough to put paid to any ideas of a Fed hike this year. And Fed officials have also been keen to dampen speculation over a possible hike. And whilst the pricing of the Fed easing cycle this year has grown (45bp of cuts now expected for this year), the biggest impact of last week's FOMC/NFP double-header has been the decline in cross-market volatility. Here interest rate, equity and FX volatility are falling sharply again as the idea of divergent monetary policy trends gets scaled back. This environment may well last into next week's key release of US April CPI.

Seagull EA

USD: Some dollar vulnerability The negative dollar reaction to a modest tick-up in US jobless claims yesterday (231k versus consensus 212k) tells us that: a) markets are probably lacking some sense of direction in the period between payrolls and US CPI; b) the generally overbought dollar remains quite vulnerable to even slightly softer US data releases; c) markets may be buying in more convincingly on the softening US jobs market narrative. Beyond very short-term adjustments, the key to taking the dollar materially lower remains inflation. Consensus is looking at 0.3% month-on-month core CPI print on Wednesday, which is still too high for the Fed to start cutting rates this summer. Any substantial – and sustainable – downward trend in the dollar may not be a story for May.

Seagull EA