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Editors’ Picks
EUR/USD holds above 1.0850 after US data
EUR/USD struggles to gain traction but manages to hold above 1.0850 in the second half of the day on Tuesday. Although the lower-than-expected US Job Openings data for April limits the US Dollar’s gains, the cautious market stance doesn’t allow the pair to push higher.
GBP/USD stays in red below 1.2800 despite weak US data
GBP/USD remains under bearish pressure and trades deep in the red slightly above 1.2750 after touching its highest level in over two months above 1.2800 earlier in the day. The US Dollar benefits from risk-aversion despite weak JOLTS Job Openings data and weighs on the pair.
Gold under pressure around $2,325.00
Gold continues to push lower and trades below $2,320 on Tuesday, erasing Monday’s gains in the process. The renewed US Dollar strength amid souring market mood drags XAU/USD lower, even though US Treasury bond yields struggle to gain traction.
ECB cuts pave the way to higher term risk premia
Historically, before QE, higher policy rates have corresponded to lower term premia and incoming rate cuts would therefore be conducive to higher premia. Going forward, QT should have a large enough impact to revive the term risk premium back to positive territory.
