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BLOCK, 2s5s Steepener


The greenback remained heavy as regional players assessed recent Fedspeak, which poured cold water on inflation concerns. The absence of notable news/data flow helped make this the main talking point in Asia-Pac hours. The DXY extended yesterday's losses, while USD underperformed all of its G10 peers.

  • NZD outperformed at the margin, amid chatter that buy stops were cut above May 21 high of $0.7222 (per BBG). The kiwi's relative strength failed to translate into any notable bid into commodity FX space, even as BBG Commodity Index edged higher.
  • JPY lagged all G10 currencies save for USD, as regional equity benchmarks firmed a tad. Gotobi Day flows may have applied some pressure to the yen.
  • The PBOC set their USD/CNY mid-point at CNY6.4283, 20 pips above sell-side estimate. BBG fixing survey had a narrow range, which added to its significance. That being said, the weaker than expected fixing failed to lend support to USD/CNH, which slipped into negative territory.
  • German GDP (f) & Ifo Business Survey, U.S. Conf. Board Consumer Confidence & new home sales as well as comments from Fed's Barkin, Evans & Quarles, ECB's Lane & Villeroy and BoE's Tenreyro take focus from here.