Today's small ranges will widen
The euro and Canadian dollar have had some decent moves today but it's hardly been the kind of stuff to get the heart pounding. Tomorrow will be better.
Or at least it should be with a handful of economic data points to digest including:
- US Conference Board consumer confidence
- Case-Shiller 20-city house price index
- Pending home sales
- Chicago PMI
- Canada Feb GDP
- BOC's Poloz and Wilkins at Parliament
Then it's the FOMC on Wednesday.
Morgan Stanley is also out with a note forecasting a cut in IOER:
We expect the Fed will have to react to the rise in EFFR by lowering IOER within the target by 5bp to pull EFFR further from the upper bound of the target range. This will be a similar technical adjustment to the ones delivered in June 2018 and December 2018. Initially, we have been expecting this IOER cut to be delivered in June, but we think it is actually more likely to come in May given the speed at which EFFR spiked and the rise in its volatility. We simply do not see a reason for the Fed to wait until June to deliver the IOER cut, especially since the Fed now has a press conference after every meeting.
