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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
USD
The USD has started the week positively. The BBDXY is up close to 0.20%, last around the 1239.50 level. Earlier highs were above 1240, while last week we ran out of steam around the 1243.50 region in the aftermath of the payrolls print.
- Focus rests with the CPI print tomorrow in the US, although the general trend in yield momentum still remains in favor of the USD. The first chart below plots the US-G3 2yr spread government bond yield spread (unweighted). The spread is back to around +240bps, we were close to +215bps in mid Jan.
Fig 1: USD Index Following Yield Spread Momentum Higher
Source: MNI - Market News/Bloomberg
- The skew of data surprises, as measured by the Citi indices, has swung back in the USD's favor as well, see the second chart below. Earlier in the year we were around cyclical lows in terms of US data surprises relative to other major economies. We have since recovered some ground, although on average, the US data surprise index is still below that of other major economies/regions.
- Interestingly, the Citi US index is now back at 24, close to fresh highs going back to May of last year.
- We may need to see continued US data relative outperformance to see a further recovery in USD indices.
Fig 2: USD & Relative Data Surprises Against Other Major Economies/Regions
Source: Citi/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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