Euro rates are near the top of their ranges again. We don't expect the front-end to remain a driver, with now only a 30% chance of an ECB cut priced down the road despite remaining risks around the outlook. Dutch pension reforms appear to help push the 10s30s steeper as dynamics detach from the US curve
The US Dollar is starting the week on a steadier footing after lagging through much of last week, weighed down by a string of underwhelming US data releases.
UBS Knowledge Network Cross-Asset Volatility Risk. Edge. Positioning. Flows. Performance.
Investors are nervously waiting on the announcement of US President Donald Trump’s tariffs. With reports that deliberations on the tariffs are still ongoing, even with hours left to their unveiling, as well as speculation about the form they will take, investors remain uncertain.
Stocks advanced as cooler-than- expected inflation data helped stanch a sharp selloff, while the escalation of U.S. President Donald Trump's chaotic, multi-front tariff war kept gains in check.
The last four weeks have delivered more uncertainty and volatility as expected and yet there were still a lot of surprises. Particularly surprising is the retreat of the USD amid rising risk aversion. Is this the end of US exceptionalism and USD supremacy? Perhaps, but uncertainty remains too high to take strong po- sitions. The safest bet in our view remains long JPY.
