Indian Government Bonds Seen Opening Steady Ahead of RBI Policy Decision 
Taiwan Central Bank Likely to Keep Interest Rates Unchanged Through 2027 
RBA Expected to Hold Interest Rates at 4.35% as Markets Watch AUD/USD and ASX 200 
BOJ Raises Interest Rates to 1% as Inflation Pressures Persist 
Kevin Warsh Faces Early Fed Test as Inflation Risks Challenge Rate-Cut Expectations 
Today’s space race could turn fatal if we don’t agree on new rules 
Jerome Powell Warns Against Politicizing the Federal Reserve, Defends Democratic Institutions 
We stay short GBPUSD because interest rate based valuations are even more stretched than USDCAD (we expect BoE hawks to be caged by an economy that is finally starting to cool), but once again reduce the directionality to the USD by opening a complimentary long position in EURGBP through options given the depressed level of volatility (2m EURGBP vols are 0.9 pts below their 6m average despite the French premium).
We remain short EUR on a handful of European crosses, but only where we believe local currency factors are bullish and justify currency appreciation even in the absence of a French political shock, namely CHF, SEK and CZK.
In the bigger picture, we are inclined to position for macroeconomic normalization in the euro, and the portfolio remains implicitly positioned along these lines through long positions in European currencies versus the dollar bloc (USDCHF and NZDSEK).
The addition of EURGBP to the portfolio augments the overall beta to a euro recovery (we believe that EURGBP would re-price much more on a Macron victory than EURCHF would, for instance).
Finally, we unwind a short volatility position in EURCHF given the substantial cooling of tail risk in the last few weeks both in ATMs and risk reversals.
