US Dollar index (DXY) closed below the key 105.00 level last week, and the decline continued on Monday.
The US Dollar (USD) trades a touch weaker against most major peers on Monday as there is not much to report for the Greenback. With US markets closed for the Memorial Day vacations. However, on the other side of the Atlantic. A shift in stance toward the European Central Bank (ECB) is beginning to emerge.
US markets are closed due to the Memorial Day holiday on Monday.
There is a very quiet economic data calendar on Monday. Most of This week will be relatively quiet, with only some soft data and US Federal Reserve (Fed) speeches planned for Thursday. Then, on Thursday, the second estimate for Q1 US Gross Domestic Product (GDP). And April’s US Personal Consumption Expenditures (PCE) numbers could hit the market. Providing more clues about the US’s disinflationary path and what the Fed might do next.
Daily Market movers: Some small headlines. The US dollar could fall further.
Traders are still looking into more details on a headline from Friday where President Vladimir Putin said to be willing to have a ceasefire. And start up peace talks if current frontlines can be adhered to as new official borders.
ECB Chief Economist Philip Lane said that an interest rate cut in June looks a given, though it might take longer for the next cut. This entirely goes against the three-cut forecasts from the markets, with numerous ECB members recently stating that a June rate cut might be a ‘one and done’ for 2024.
There is risk-on sentiment across the board, with China and Europe markets comfortably in the green.
The CME Fedwatch Tool is pricing 99.1% for no change in the policy rate for June. September futures are seeing greater action, where it is a neck-and-neck contest with 50.2% possibilities for keeping rates same against 44.9% chances for a 25 basic points (bps) rate drop and 4.5% chances for even 50 bps rate cut. A marginal 0.5% charge in an interest rate hike.
The benchmark 10-year US Treasury notes trade at around 4.46%. And are not moving on Monday due to the US bank holiday.
