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USD/JPY, Gold: Risk for US dollar, Treasury yields skewed higher unless CPI comes in cool
The soft-landing narrative that’s been accompanied by growing monetary policy easing expectations faces a series of big tests this week with rate decisions from the Fed, ECB and BoE, long bond auctions in the US and Japan, US consumer price inflation along with flash PMIs. Except for the latter, risks are skewed towards higher yields following recent market moves, creating an environment which may be positive for the US dollar. Entering what’s traditionally a strong period for riskier asset classes on the back of declining market liquidity, that amplifies the risk we could see extremely whippy price action across ... (full story)