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Traders Brace for Eurozone CPI and US Job Openings Data as Central Banks Weigh Rate Movest

3 weeks ago

Traders are positioning ahead of critical data releases on Eurozone CPI and US job openings to anticipate central bank rate decisions. In Europe, European Central Bank President Christine Lagarde indicated that there is insufficient evidence to suggest that inflationary threats have subsided, reinforcing expectations that the ECB might pause interest rate cuts this month. The euro remained relatively stable following the French election results, which implied a reduced likelihood of extreme policies from the far-right.

In the US, 10-year Treasury yields retraced some of Monday’s seven-basis-point gain, where the benchmark had neared 4.5% amid speculation that a Trump presidency would lead to increased fiscal deficits and higher inflation. This movement further bolstered the dollar, which strengthened against all of its Group-of-10 peers.

The dollar’s rise is being driven by the surge in US Treasury yields overnight. Ironically, investor concerns about US fiscal sustainability are contributing to higher Treasury yields, which in turn support a stronger dollar.

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