BoA says not landed scenario - Likes the USD and choppy FX markets likely to persist

BoA remarks via eFX.

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• "We believe G10 economies remain in a non-landing scenario. Manufacturing PMI has been weak, but services PMI is so strong, that the global composite PMI is pointing to expansion. Labor markets remain hot, particularly in the US, where the weather-adjusted NFP reached an extreme level in March. China is recovering fast during reopening, with data surprises at a decade high," BofA notes.
• "The choppy FX path we have seen this year is likely to continue. As we have argued before, data tends to be volatile when inflation is high. We see renewed USD strength as more likely than further weakness in the short term, but still within the current range. We remain bearish USD in the medium-term to long-term, on valuation and assuming inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term will eventually move towards the target, but the timing remains uncertain. Moreover, stagflation Stagflation Stagflation is an economic environment characterised by slowing economic growth and rising inflation. In fact, the term “stagflation” is derived from the words “stagnation” and “inflation”. Stagflation as Real-Life ExampleThe 1970s is a famous stagflationary period and although there isn’t a single correct answer, economists identified two possible explanations for why it occurred. The first reason can be a supply shock like rapid increase in oil prices. This situation also increases production Stagflation is an economic environment characterised by slowing economic growth and rising inflation. In fact, the term “stagflation” is derived from the words “stagnation” and “inflation”. Stagflation as Real-Life ExampleThe 1970s is a famous stagflationary period and although there isn’t a single correct answer, economists identified two possible explanations for why it occurred. The first reason can be a supply shock like rapid increase in oil prices. This situation also increases production Read this Term risks could lead to more sustained USD strength," BofA adds.