• Gold up $10 to $1976
  • WTI crude oil up $3.72 to $104.32
  • US 10-year yields down 3 bps to 2.69%
  • S&P 500 up 49 points to 4446
  • GBP leads, NZD lags

We got a taste of the peak inflation trade yesterday but the market dove in today. Late in the day, the Fed's Waller endorsed it, saying he thinks March was the top.

In response, Treasury yields continued to fall, stocks rebounded and some air came out of the US dollar. Notably, the dollar rally stalled with EUR/USD and GBP/USD both testing the recent cycle lows (and failing to break). Cable has flirted with 1.30 for awhile but hasn't been able to break definitively lower and it jumped today in a sign that the bulls might still have some life. The euro made some gains from 1.08 as well but that will be tested by the ECB decision on Thursday.

In commodity currencies, the NZD was sold despite a surprise 50 bps hike while the Canadian dollar was bought after a 50 bps hike that was in line with expectations. That's a tough one to square. USD/CAD fell a full cent from 1.2675 in a slow move down after the BOC. That was in keeping with some other USD moves so it's not a shock but the loonie certainly outperformed its commodity cousins. The rally in oil might have had something to do with it as well.

As for the BOC decision, it wasn't overly hawkish but Macklem did says the BOC was prepared to be forceful in future moves and that's increasingly seen as a code-word for 50 bps hikes. He was pressed on the issue in the Q&A and said the comment can speak for itself.

In a sign that the market is re-adjusting to rates falling, USD/JPY sagged today. It's barely a dent in the month-long rally but it leaves a doji star on the chart.

FX wrap ticker April 13