Macro View:
EUR: Investors globally are reevaluating their dovish European Central Bank (ECB) outlook, leading to an extension of the rebound in Eurozone rates and European Government Bond (EGB) yields. This development enhances the Euro's relative rate appeal, particularly against low-yielding currencies like the JPY and CHF. The EUR's performance continues to be influenced by the price action in Eurozone rates and EGB markets. Any evidence of investors reducing their ECB rate cut expectations could further bolster the EUR. Market sentiment suggests that any potential strengthening of the EUR is likely to be observed against currencies such as the JPY and CHF.
JPY: Recent statements from the Bank of Japan (BoJ) Governor indicate a reluctance to exit negative interest rates in the near term. The possibility of such a move this month seems improbable, with the BoJ awaiting substantial information regarding sustained wage growth. Speculation around a rate hike this month has diminished, partly due to uncertainties arising from the recent earthquake in Japan. The delayed departure from negative rates has prompted renewed selling of the yen at the beginning of the year, keeping the yen under pressure due to the continuation of ultra-loose monetary policy.
EUR: Investors globally are reevaluating their dovish European Central Bank (ECB) outlook, leading to an extension of the rebound in Eurozone rates and European Government Bond (EGB) yields. This development enhances the Euro's relative rate appeal, particularly against low-yielding currencies like the JPY and CHF. The EUR's performance continues to be influenced by the price action in Eurozone rates and EGB markets. Any evidence of investors reducing their ECB rate cut expectations could further bolster the EUR. Market sentiment suggests that any potential strengthening of the EUR is likely to be observed against currencies such as the JPY and CHF.
JPY: Recent statements from the Bank of Japan (BoJ) Governor indicate a reluctance to exit negative interest rates in the near term. The possibility of such a move this month seems improbable, with the BoJ awaiting substantial information regarding sustained wage growth. Speculation around a rate hike this month has diminished, partly due to uncertainties arising from the recent earthquake in Japan. The delayed departure from negative rates has prompted renewed selling of the yen at the beginning of the year, keeping the yen under pressure due to the continuation of ultra-loose monetary policy.