The euro continues to march higher as it ticked above 1.11 for the first time since late December. Given that December move was something of a low-liquidity squeeze, you have to go back to July 2023 to see these levels.
Unfortunately, this is more of a US dollar story than a positive narrative on anything unfolding in Europe. US Treasury yields fell again today by 3-6 bps across the curve. The market is looking for some kind of dovish indication from Powell, though with Fed fund futures priced for nearly 100 bps over the remaining three meetings this year, I'd argue that pricing is already aggressive.
In any case, USD-longs (and bond shorts) have been a crowded position that's unwinding in a thinner August market. That leaves me skeptical that we will get a rise above the July 2023 high of 1.1275.
