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EUR/USD Through Earlier Lows as Brainard Leans Hawkish

CROSS ASSET
  • Greenback remains bid on the back of the Brainard speech, with EUR/USD through the overnight lows and narrowing the gap with next support at 1.0945, the Mar28 low.
  • USD/JPY gets a bump higher on the move, putting the rate comfortably back above the Y123.00 handle. US 10y yields now back above the 2.50% mark, with Brainard's speech mentioning not just imminent rate rises, but also the speed of balance sheet shrinkage:
  • She expects a series of interest-rate increases and balance sheet reduction as soon as the May FOMC meeting [...] "I expect the balance sheet to shrink considerably more rapidly than in the previous recovery, with significantly larger caps and a much shorter period to phase in the maximum caps compared with 2017-19

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