The dollar is in a bad way, falling by -0.5%, with the $-Index dropping below the short-term low of 103.05 to its lowest level since the morning of January 16, around 102.85.

T-Bond yields are falling, but no more than Bunds and OATs (3Pts on Thursday); in fact, the opposite is true, with a small rise of +1.3Pts to 4.115% (while Wall Street remains in full risk-on mode, with the S&P500 setting a new intraday record above 5.130Pts).130Pts).

The euro gained +0.4% to 109.40 (versus -0.3% in the morning to 1.0867), even as the hypothesis of rate easing became clearer in Europe, as the ECB reduced its inflation projections for the eurozone to 2.3% in 2024, then 2% in 2025 and 1.9% in 2026 (price rises would be in line as early as next year, excellent news).

Excluding energy and food products ('core inflation'), its underlying inflation assumptions have also been revised downwards to an average of 2.6% for 2024, then 2.1% and 2% respectively for the following two years.
The ECB has also lowered its growth projection for 2024, to 0.6%... not to mention the -11.3% drop in orders to German industry in January, as electric vehicle orders collapsed in mid-December following the abrupt abolition of the purchase incentive.
According to the teams at Muzinich, an asset management company specializing in credit, the overnight interest rate swap market estimates an 86% probability that the ECB will cut rates by 25 basis points in June.

There were also several US figures: the US trade deficit widened to $67.4 billion in January, compared with the previous month's $64.2 billion (which was revised from an initial estimate of $62.2 billion), according to the Commerce Department.

This 5.1% month-on-month increase in the deficit reflects a 1.1% rise in US imports of goods and services, to $324.6 billion, while exports were almost stagnant (+0.1%) at $257.2 billion.
US productivity was revised 'unchanged' at 3.2%, and weekly jobless claims were also virtually unchanged last week.
The weaker Dollar seems to reflect expectations of a sharp drop in US job creation in February (190.000), but the release of the 'NFP' should not disappoint expectations: the greenback could then rally.
Its weakness is partly fuelling the rally in the ounce of gold, which is caracoling from peak to peak, now above $2,163/Oz.


Copyright (c) 2024 CercleFinance.com. All rights reserved.