Daily thread to exchange ideas and to share your thoughts
Good day, everyone! Hope you're all doing fine as we get things going here in the European morning session today. Headlines have been few and far between thus far but there are some notable moves among major currencies as the dollar holds steady since overnight trading, following Fed dove James Bullard's remarks here.
Meanwhile, the kiwi is leading gains after the RBNZ left its OCR unchanged at 1.50% earlier today although the central bank did stick to its dovish message and suggested that further rate cuts should come along soon enough.
The yen is a little weaker as Treasuries lose ground with yields climbing higher on the day. USD/JPY sits around 107.40-50 currently with 10-year yields holding 2.4 bps higher around 2.01% amid more flat tones in equities.
In the bigger picture, it's still all about trade talks this week with the Trump-Xi meeting taking up more importance now in my view after Bullard's comments overnight. Markets are not ruling out a 50 bps rate cut in July just yet but positive developments in the trade rhetoric could very well help to see that priced out in the coming week.
On the flip side, more negative developments could reignite the debate for a 50 bps cut and maybe give reason for the Fed to go beyond just an "insurance rate cut" next month.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.