Some US dollar selling has crept in, particularly against the euro and pound. It comes with a bump in risk assets that’s pushed the S&P 500 up 0.2%.
The dollar has started the year strongly and it’s been helped by a re-think of the amount of Fed cuts that will come in 2024. That’s declined to 140 bps from upwards of 160 bps in late 2023. What happens next will hinge on tomorrow’s non-farm payrolls report. The consensus is +170K from +199K previously.
Some of the latest dip in the dollar might be related to the London fix as well as flows continue to dominate early in the year.
GBP/USD 10 mins
Eyes remain on the fixed income market. US 10s hit 4% for the second day in a row but backed off once again. Yesterday 10s hit 4% around this time and then fell all the way to 3.90%.