King Dollar
April 28, 2022
–Treasury weakness into the end of the day with TYM trading 119-215 late; currently 119-28 in front of today’s Q1 GDP release, which is expected 1.0 to 1.2% with the Price Index +7.2%. Jobless Claims 180k, and the treasury auctions seven-year notes. Relief rally in stocks this morning as FB was better than expected. Today AAPL and AMZN report.
–The dollar continues to surge with $/yen 130.58 as the BoJ clings to easy policy. CNY has weakened from 6.35 to 6.61 so far in April, and EUR broke 105, with GBP near 1.25. Commodities priced in dollars are becoming a huge strain on emerging economies. Sweden’s Riksbank raised rates and is going to start shrinking its balance sheet in a policy shift which acknowledges the inflation problem that the ECB is still trying to ignore. FOMC next week with Powell giving an in-person press conference. Tomorrow is the Fed’s preferred measure of inflation, Core PCE prices, expected 5.3 to 5.5% from 5.4 last. Also released tomorrow is the ECI (Employment Cost Index) expected 1.1%. The 1.3% figure for Q4 was one of the contributors to Powell’s hawkish pivot.
