Should We Keep an Eye on the Power Balance Between the U.S. and Europe?
07.04.2021
- The euro is holding steady
- Release of the FOMC Minutes
Yesterday, in a sharp reversal from the previous day, a risk-off sentiment took hold, characterized by falling stock prices, a weaker U.S. dollar, and lower interest rates; in particular, the decline in long-term U.S. interest rates—which had been rising steadily in recent days—was especially notable.Bonds were bought, with the yield on the 10-year U.S. Treasury note falling to 1.66%, and the yield on the 5-year U.S. Treasury note dropping to 0.87%, a decline of 3.88%. Crude oil remained flat, and gold traded around $1,730.
While cross-yen pairs had been trending higher recently, the USD, CAD, and GBP are now trending lower. The GBP/JPY pair, which had recently reached 153.4, has fallen by about 170 pips to 151.7. In contrast, the EUR/JPY pair has held steady and is trading around 130.2.
No major economic indicators are scheduled for release today in European time. At 20:00, the U.S. MBA Mortgage Applications Index will be released; at 21:30, the Canada-U.S. trade balance; at 22:00, remarks by U.S. Chicago Fed President Evans; at 23:30, U.S. weekly crude oil inventories;at 25:00, remarks by U.S. Richmond Fed President Barkin; at 26:00, remarks by U.S. San Francisco Fed President Daily; and at 27:00, the release of the U.S. FOMC minutes.We will carefully assess how the U.S. dollar reacts to today’s release of the U.S. FOMC minutes.
Author: Keisuke Sakurai
