US treasury yields surge ahead of GDP data

Today, the economic calendar will be fairly light on the European side. Investors shall be paying attention to the ECB economic bulletin. Earlier today, German GfK consumer climate was slightly better than expectations. The EUR/USD pair surged above the 1.07 level supported by this week’s optimistic PMI data which showed expansion in Eurozone business activity. The fibre is currently trading at 1.0724.

The Bank of Japan is presently in the spotlight as the Yen continues to fall and has hit a 34-year low against the USD. It will be a challenging task for the Bank of Japan Governor Ueda to navigate out of the ultra-easy monetary policy while maintaining public confidence in the currency, and hence avoiding a repeat of the 2022 history, when the dovish remarks of previous BoJ Governor Kuroda had triggered the yen to slide rendering currency market intervention necessary. The USD/JPY is currently trading at 155.68 at the time of writing.

Today, investors will be awaiting US GDP data. Q1 annualised GDP is expected to demonstrate growth for yet another quarter and economic growth will indeed support the Fed’s headstrong attitude regarding maintaining tight policy to curb inflation. Meanwhile, treasury yields have surged with the yield on the 2-year note at 4.93% and that of the 10-year note at 4.65%. Other data due today include quarterly core personal consumption expenditures, jobless claims, wholesale inventories and pending home sales. The greenback was trading at 105.71 at the time of writing.