“Macroeconomic fundamentals continue to point to a higher dollar as short-term Treasury yields versus comparable maturity in sovereign yields are positive and inflation is high globally,” said Stan Shipley, fixed income strategist, at Evercore ISI in New York.
Powell said a half percentage point interest rate hike “will be on the table” when the US central bank meets on May 3-4.
Federal funds rate futures have started trading tacking on a third 50 basis point increase in July, considering hikes of the same magnitude in May and June. The calculation represents a increase of almost 250 accumulated basic points for 2022.
“Even if the Fed makes consecutive 50 basis point hikes, it’s still at a rate that is on the lower end or below the neutral rate”said Calvin Tse, chief strategist at the firm Americas Developed Markets.
Across the Atlantic The euro was down 0.4% at $1.0792. after European Central Bank officials sent mixed signals about the monetary policy path for the euro zone.
The President of the ECB, Christine Lagard, struck a dovish tone in saying a cut in the region’s growth outlook is possible, a day after Governor Luis de Guindos joined other officials in calling for an early end to the bank’s asset purchase plan, along with an interest rate hike, in July.
Investors are eyeing the second round of Sunday’s French presidential election between President Emmanuel Macron and far-right challenger Marine Le Pen. The latest polls suggest that Macron will win with 55% of the vote.
Source: Ambito
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