The report highlights strengthening USD on US inflation spikes and GBP weakness due to UK political turmoil, despite robust GDP data. Hawkish BoJ comments and rising JGB yields are also in focus as markets anticipate a June rate hike.
Key Takeaways
- 1.US inflation spikes and the confirmation of Kevin Warsh as Fed chair are recalibrating market expectations for rate hikes.
- 2.Japanese 30-year yields have reached new highs (3.93%) as BoJ board members signal a desire for earlier rate hikes.
- 3.Despite strong Q1 GDP growth, the British pound faces downside risks from a potential leadership challenge against Keir Starmer.
Table of Contents
- USD/JPY: Inflation risks and hawkish BoJ comments in focus
- GBP: UK political risks providing an offset to support from stronger UK growth
- KEY RELEASES AND EVENTS
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Authors
Lee Hardman
Securities
USDJPY30-year JGBGBP
Themes
Stagflationary PressuresCentral Bank Policy DivergencePolitical Risk and Fiscal Credibility
Regions
North AmericaAsia PacificUKUnited StatesJapanUnited Kingdom