The US dollar remains supported despite Middle East de-escalation as markets price in a more hawkish Federal Reserve concerned with inflation shocks. In Europe, soft economic data is scaling back ECB rate hike expectations.
Key Takeaways
- 1.The US Dollar remains supported as the Federal Reserve pivots towards a more hawkish stance to address inflation risks tied to high oil prices.
- 2.European Central Bank tightening expectations have dropped from over 80bp to 55bp this year following soft PMI data indicating a Q2 economic contraction.
- 3.The National Bank of Hungary (NBH) is expected to keep rates at 6.25% today, but the market is heavily pricing in a rate cut for June.
Table of Contents
- USD: Fed story providing support
- EUR: Whatever happened to three ECB rate hikes?
- HUF: NBH getting closer to rate cuts
- CEE: Time to reduce market hawkish pricing
- Author
- Disclaimer
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Authors
Chris TurnerFrantisek TaborskyFrancesco Pesole
Securities
DXYEURUSDEURHUFBUBOR
Themes
Monetary Policy DivergenceGeopolitical De-escalation
Regions
North AmericaEuropeAsia PacificUnited StatesHungaryPoland