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On May 18th, Ed Yardeni, president and chief investment strategist of Yardeni Research, stated that as investors become increasingly concerned about inflation, the Federal Reserve needs to keep pace with the bond market or risk losing control over borrowing costs. He pointed out that given the current market environment is "no longer" suitable for an accommodative stance, the Fed should remove its dovish bias at its June meeting. "If the Fed fails to remove this bias, investors will conclude that the Fed is lagging behind the inflation curve and will demand a higher inflation risk premium," Yardeni said. "We expect the Fed to keep interest rates unchanged at its June meeting and shift to a tightening policy stance." Yardeni added that the current economic context no longer provides a reason for an accommodative bias, let alone rate cuts. Instead, he believes that a more hawkish Warsh than the market expects could actually benefit Trump by helping to suppress long-term Treasury yields.According to the National Bureau of Statistics, the price of second-hand residential properties in Shenzhen rose 0.3% month-on-month in April (up 0.4% in the previous month) and fell 6.5% year-on-year (down 7.0% in the previous month).According to the National Bureau of Statistics, the price of newly built commercial residential buildings in Shenzhen rose 0.1% month-on-month in April (compared to 0.2% previously) and fell 5.3% year-on-year (compared to -5.5% previously).According to the National Bureau of Statistics, the price of second-hand residential properties in Guangzhou in April increased by 0.2% month-on-month (previous value: +0.2%) and decreased by 7.9% year-on-year (previous value: -8.1%).According to the National Bureau of Statistics, the price of newly built commercial residential buildings in Guangzhou in April increased by 0.1% month-on-month (previous value: +0.3%) and decreased by 4.4% year-on-year (previous value: -4.7%).

USD/CHF Consolidates in a Range of 0.9320-0.9350 on Expectations of Rate Reversion to Neutral

Drake Hampton

Apr 08, 2022 09:57

Tips

  • USD/CHF remained stuck around 0.9350 despite a big increase in US Treasury yields.

  • The DXY is aiming for 100.00 as traders increase their expectations for an aggressive rate hike.

  • Russia resigns from the United Nations Human Rights Council.

 

Since Thursday, the USD/CHF pair has been swinging within a narrow band of 0.9318-0.9348 as Federal Reserve (Fed) policymakers have begun prescribing a reversion to neutral rates from ultra-loose monetary policy postures.

 

After commenting on the amount to which the Fed will raise interest rates in future monetary policies, members of the Fed's Monetary Policy Committee (MPC) have changed their focus to calling for a return to neutral policy. The ultra-loose monetary policies and helicopter money used to boost growth following the Covid-19 outbreak have served their purpose, and it would be preferable to return to normal rates and a self-sufficient economy. Atlanta Fed President Raphael Bostic stated on Thursday that while it is quite acceptable for the Fed to move policy closer to neutral, it should go cautiously, according to Reuters.

 

On the Russia-Ukraine front, Russia is expelled from the United Nations (UN) Human Rights Council after its members voted against the Kremlin's war crimes in Bucha, Ukraine. Additionally, US lawmakers have decided to prohibit Moscow from importing oil, gas, and coal. Additionally, the former has opted to revoke its 'Most Favored Nation' trade designation, resulting in higher tariffs for Moscow.

 

Meanwhile, the US dollar index is heading towards the enchanted level of 100.00, fueled by forecasts for better US Consumer Price Index (CPI) data next week. The yield on the 10-year US Treasury note has recaptured a three-year high of 2.66 percent as rate rise worries resurface.

USD/CHF

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