stagflation

Euro Gains Amid Stable ECB Policy, BoE Inflation Surprises, and Hawkish BoJ

Eurozone economic data for the first half of the year has been distorted by US tariffs.

Fed Independence in Question as Markets Eye Inflation Data

Gold Surge Continues Amid Rising Economic and Geopolitical Fears; Target USD 3,200/oz

• Gold prices rallied just shy of 10% in March, surpassing USD 3,100/oz to extend the year-to-date gains to 19% (after rising 27% in 2024).

• A surge in investment demand is behind the latest moves, with comments by US President Donald Trump and Elon Musk, as well as weak US consumer survey data, amplifying market fears as we approach the 2 April tariff announcements. The acceleration of ETF buying marks a sharp reversal from the outflows of this time last year. 

FOMC Aftermath. Dovish Fed Strategy and Tactical Shifts in FX and Rates

Post-FOMC strategy thoughts Dovish Fed – high convictions in long JPY/KRW, short S$NEER, long 10y IGB; increase short CNH basket conviction; enter short THB/JPY. 

USD: Stagflation blues as Powell soothes markets, but USD sell-off may slow

The Fed left its dot plot unchanged and revised down its growth forecasts while revising up its inflation forecasts. But Fed Chair Jerome Powell said that he still saw room for rate cuts given that the effect of tariffs on inflation will be transitory. He also said the probability of recession was not high. 

EURGBP Outlook. Tariff Risks, Stagflation, and Carry Appeal Shape the Future

• As we had expected, the EURGBP spike in January—which was sparked by UK-idiosyncratic risks—has reversed, and we expect the pair to edge lower over the year toward 0.82. 

GBPCHF Outlook. Strong Carry Appeal Amidst Risk-Driven Shifts and Trade Uncertainty

• Following the January dip, the GBPCHF has been testing the upper bound of its trading range over the last six months. We expect the currency pair to stay largely range bound in the coming months.