Forex News May 13, 2022

Risk

• So far today, risk has remained in a more positive zone.
• At the very least, equities are getting some breathing room as the week comes to a close. There is still the US session to navigate, and if the wild swings this week have taught us anything, it is to never discount a change in sentiment before the closing bell.
• But, for the time being, there are some encouraging signs. European indices are up 1.2 percent to 1.6 percent, while US futures are up as well, at least ahead of North American trading.
• On the day, S&P 500 futures are up 1.1 percent, Nasdaq futures are up 1.7 percent, and Dow futures are up 0.8 percent.
• Bond yields are also rising, with 2-year Treasury yields rising 6.6 basis points to 2.588 percent and 10-year Treasury yields rising 8.5 basis points to 2.902 percent. In FX, the recent dollar rally has taken a breather, with the greenback holding more mixed with no real technical significance so far today.

ECB

ECB policymaker Mario Centeno: APP should end in the first few weeks of Q3, rate hike “sometime later”

A departure from Centeno’s recent hawkish remarks, but that is to be expected given his background. He also adds that there appears to be no signs of inflation expectations de-anchoring, emphasising his sense of urgency in the matter.

South Korea

South Korea reports that North Korea appears to be preparing for another nuclear test.

This will be North Korea’s seventh nuclear test, according to Yonhap, citing information from South Korea’s presidential office.

There are no specifics on what the test will entail, but it will be North Korea’s seventh such move in the last two decades.

The first occurred in 2006, followed by 2009, 2013, twice in 2016, and again in 2017.

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