Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
BOJ Policymakers Warn Weak Yen Could Fuel Inflation Risks and Delay Rate Action 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
Why Trump’s new pick for Fed chair hit gold and silver markets – for good reasons 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
The US Federal Reserve has recently given a vibrant indication that the tightening cycle is over. Quantitative tightening will also end earlier than previously expected, helping to ensure global liquidity remains flush.
Treasuries continued to rally, with movements concentrated in the front end, steep ending the 2s/10s curve. Longer-dated USD swap spreads have narrowed sharply on convexity, hedging flows from RMBS investors.
The US Treasuries price action continued where it left off last week, with 10-year yields down another 2.5bps. USD swap spreads have capitulated on convexity hedging flows: 10-year swap spreads are now at their lowest since 2017. German bund yields were dragged lower by Treasuries after an initial sell-off following positive IFO Survey data. There was a widening of peripheral spreads in European yields, with Italian, Spanish and Portuguese yields up 3-5bps. Equity markets were broadly lower, with the FTSE closing off 0.4%, the DAX down 0.2%. The Dow Jones was up 0.1% and the Nasdaq was flat. The Apple services launch was not particularly well received by investors (AAPL -1.6%). WTI is currently up 0.7% at USD59.98/b, while gold is up 0.6% higher at USD1,322/oz.
Trading tips: Stay long in 3Mx2Y vs 3Mx30Y ATMF swaption straddles, simultaneously uphold longs in 3Mx2Y ATMF straddles with $1.5bn notional (notification 6/3/19, maturity 6/5/21, strike: 2.63%) at 35c vs selling 3Mx30Y ATMF straddles with $141mn notional (notification 6/3/19, maturity 6/5/49, strike 2.92%) at 415c. P/L since inception: +3.1abp. Courtesy: ANZ & JPM
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing 19 (which is mildly bullish), while hourly USD spot index was at 108 (bullish) while articulating (at 09:50 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
