USD A Touch Lower To Start The Week, U.S. & UK Holidays Underway

The BBDXY is a little below late Friday levels, although the lack of meaningful macro news flow and U.S./UK holidays tempered activity in Asia-Pac hours, resulting in relatively tight ranges.

• An uptick in Chinese & HK equities applied light pressure to the USD, supporting the AUD & NZD in the process.
• EUR shrugged off weekend ECB-speak. GC rhetoric generally reaffirmed recent messaging, playing down wage-related worries when it comes to inflation feedthrough, while guiding heavily towards a June cut.
• Chief economist Lane underscored the need for restrictive policy settings through ’24, even as he greenlighted a June cut.
• Lane is scheduled to speak again today, with comments from GC hawk Holzmann also due.
• The German IFO survey headlines today’s data calendar. Survey expectations point to a modest uptick in all of the major IFO metrics.
• GBP shrugs off Westminster-centric headlines, as embattled PM Sunak’s latest policy suggestions came under widespread scrutiny, while Conservative MPs continued to step down ahead of the election. GBP unaffected owing to expectations for a comfortable Labour victory in the July ballot.
• CHF continues to struggle, with some TWI measures hitting the lowest level seen since April ’23.
• Japanese Vice Finance Minister Kanda reaffirmed willingness to act against “excessive” FX moves. Those comments, while familiar, were enough to promote a light JPY bid in Tokyo trade. BoJ rhetoric also helped.
• This week’s broader European focus is set to fall on May’s flash inflation data. The German regional and national readings will cross on Wednesday, with the Eurozone readings due Friday.
• Elsewhere, U.S. PCE data will also cross on Friday.