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The US dollar may be at an inflection point
The US dollar softened last week as yields softened, and it continued to pare the gains scored in the second half of March. The dollar's inability to gain after the much stronger than expected March employment data may have encouraged a bout of profit-taking. Next week offers a test on the hypothesis that the dollar-bullish divergence meme has been fully discounted. After a brief hiatus, US coupon sales will return ($110 bln), and a string of high-frequency data is likely to confirm an acceleration of prices and activity. On balance, we expect the US dollar and long-term interest rates to rise next week. US rates ... (full story)