The USD faces resistance despite US economic outperformance due to crowded positioning and political headlines. Meanwhile, cooling Japanese inflation and Turkish political risk are driving regional FX volatility.
Key Takeaways
- 1.The USD is struggling to rally further despite US economic data outperforming the rest of the developed markets, hampered by long positioning and a high hurdle for gains.
- 2.Japan's April National CPI missed expectations, falling to 1.9% (new core), which has slightly lowered the probability of a Bank of Japan interest rate hike in June.
- 3.Political volatility in Turkey, specifically a court ruling against the main opposition leadership, triggered $6bn in outflows and maintains a high risk premium for the Lira.
Table of Contents
- USD: Data Divergence Continues But USD Struggling To Rally Further
- JPY: CPI Miss Marginally Lowers Hike Probability
- National CPI Indices
- TRY: Headline Reaction Easing But Political Risk Premium Should Remain High
- Memo Of The Day:
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Authors
Matt Atherton
Securities
EURUSDGBPUSDAUDUSDDXYUSDJPYTRY
Themes
Macro Data DivergenceCentral Bank Policy ShiftsGeopolitical Risk Premium
Regions
North AmericaEuropeAsia PacificUnited StatesJapanTurkey