Treasury yields declined yesterday on softer revision of Q1 numbers stateside. GDP came in at 1.3% down from 1.6% from initial estimates, and the core PCE number showed inflation eased further to 3.6%. USD retreated as a result, giving up much of the gains from Wednesday. GBP declined across the board, correlating with a fall in risk appetite with US equities declining.
*Daily move - against G10 rates at 7:30am, 31.05.24
** Indicative rates - interbank rates at 7:30am, 31.05.24
Could be a volatile end to the month with the release of inflation numbers from Europe and the US. Today's European numbers will likely have little impact on what the ECB does next week, with markets putting a 98% probability of a rate cut. The numbers will likely have a bigger bearing on what the ECB does in subsequent meetings, and could well determine the outcome of the ECB statement during next week's monetary policy meeting. In the afternoon we focus on the US and the outcome of the core PCE number. A soft number, and we will likely see further USD weakness going into next week's US job numbers.
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