USDIndex – extended gains to 110.26, stocks and bonds were down while the 10-year yield surged over 10 bps to hit 3.60%, but slid to finish at 3.555%. It is the first close over 3.5% since April 2011. The curve steepened to -39 bps from -45 bp.
ECB’s Lagarde expects to raise rates further over the “next several meetings,” in her speech on Monetary Policy in the Euro Area. That and the surprisingly bold 100 bp rate boost from Sweden’s Riksbank kicked off a very heavy week of central bank decisions and got trading off on the back foot. The markets are repricing for the possibility other central banks will be in more of a rush to tighten policy.
Putin declares partial military mobilisation to bolster Ukraine war effort.
EUR – plummets below 0.9900.
JPY – topped 144.00, before drifting by 60 pips on the EU open as Yen strengthened. The BoJ left its bond buying schedule unchanged and signalled ongoing focus on trying to cap yields which may have helped to soothen nerves.
GBP – dipped to 1.1338, at 37-year lows.
Stocks: US500 and the US30 were down just over -1%, with the US100 off -0.95%. European rates closed up over 10 bps, and bourses dropped over -1%. JPN225 and ASX closed with losses of -1.6% and -1.4% respectively yesterday, and Hang Seng and CSI 300 are currently down -1.2% and -0.3%. US and European equity futures are also in the red.
USOil – ticked up to $85.50.
Overnight – BoJ maintains bond buying program, with the focus on trying to keep a lid on yields, ahead of the policy decision later in the week. The BoJ plans to buy 150 billion yen of debt in the 5-10 year and 100 billion yen of securities with maturities of 10-25 years. That is on top of the offer of unlimited purchases of 10-year bonds at 0.25%. The 10-year rate climbed to the 0.25% upper limit of the BoJ’s tolerated range last week for the first time in three months, as officials tried to talk up the Yen.
Today – The FOMC began its 2-day meeting.
Biggest FX Mover @ (06:30 GMT) EURJPY (-0.80%) dipped to 142.00. MAs aligning lower, MACD histogram & signal line turned negative and falling. RSI 69, H1 ATR 0.271, Daily ATR 1.56.
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