Bond market leading the way
The euro is threatening the key 1.1500 level in the aftermath of the CPI report. The dollar is generally bid but I question the sustainability of some of those moves against other currencies that will be facing the same inflationary pressures.
The euro will be pinned by low rates though and this move looks interesting on a fundamental and technical level.
Watch the 1.1500 level as we plumb the lowest levels since July 2020.
The driver is a repricing in Fed rate hikes and the overall pace of hiking. US 5s are up 11.7 bps to 1.185% to erase most of the decline this month. We'd been as low as 1.05% late last week.
There's a sale of US 30s today that will be very itneresting .They're trading at 1.886%, up 4.6 bps.
