US interest rates hit new high as April Nonfarm Payrolls approaches

US 10YR Treasury yield makes fresh year-to-date high

The 10YR Treasury yield, a key benchmark for US interest rates, is on the verge of hitting 4.5% for the first time since November. This surge signals growing investor expectations of continued economic strength and potential adjustments – or lack thereof – in monetary policy. Such movements in Treasury yields are crucial for forex and bond markets, influencing investment strategies and interest rate expectations.

Powell says Fed not rushing to cut US interest rates

Federal Reserve Chair Jerome Powell emphasized a cautious approach to adjusting US interest rates, indicating the Fed’s confidence in inflation declining before considering rate cuts. Powell’s stance suggests a watchful yet optimistic outlook on the economy, affecting market sentiments and future interest rate predictions. By contrast, European bank officials recently shared their proactive attitude towards cutting rates – not wanting inflation to drop too sharply without lowering rates first.

Fed interest rate cut odds down to 59% in June

The likelihood of the Federal Reserve cutting interest rates in June has diminished, according to Fed Funds futures from the CME. With expectations now closer to 50/50, investors question just how long it will be until rates begin to fall. This adjustment in market expectations reflects broader economic analyses and Powell’s recent comments on monetary policy, indicating a less immediate need for rate adjustments.

Nonfarm Payrolls expected at 200k in April

April’s Nonfarm Payroll report for March is anticipated to show another strong reading of 200k new jobs. Strong employment figures in 2024 so far have bolstered Fed Chair Powell’s stance on holding off interest rate cuts, underlining the US economy’s resilience and the central bank’s criteria for policy decisions.

US dollar approaching fresh highs in major forex pairs

The US dollar is nearing new peaks against major currencies, with EUR/USD falling below 1.0800, GBP/USD approaching 1.2500, and the USD/JPY closing in on 152.00. This appreciation reflects the dollar’s strengthening position amid shifting interest rate expectations and robust US economic data, impacting forex trading and international financial markets.