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The yield on the two-year U.S. Treasury note fell to a six-month low of 3.6550% and was last at 3.6611%.On April 4, local time on April 3, U.S. Secretary of Health and Human Services Robert Kennedy Jr. said that about 20% of the layoffs in the Department of Government Efficiency were wrong and needed to be corrected. The U.S. Department of Health and Human Services laid off about 10,000 people on the 1st. Kennedy said that people who should not have been laid off were laid off, and the department is restoring their positions. Kennedy said that canceling the entire lead poisoning prevention and monitoring department of the Centers for Disease Control and Prevention was one of the mistakes. At present, it is unclear what other projects Kennedy may plan to restore.Bank of Japan Governor Kazuo Ueda: Will consider the impact of food costs on consumers.On April 4, local time on the 3rd, the automobile company Stellantis said that due to the impact of the US import automobile tariff policy, the company decided to lay off 900 employees in its five US factories and suspend production operations at two assembly plants in Canada and Mexico. Antonio Filosa, Chief Operating Officer of Stellantis Americas, said that the US factories that were laid off were powertrain and stamping parts factories, which produced spare parts for two assembly plants in Canada and Mexico. According to the plan, the assembly plant in Canada will stop production for two weeks, and the assembly plant in Toluca, Mexico will suspend production throughout April. Filosa said the company is "continuing to evaluate the medium- and long-term impact of tariffs on operations."Bank of Japan Governor Kazuo Ueda: Non-weather factors may push up food prices.

Prior to the Release of EU/US PMIs, EUR/USD Pares Its Largest Daily Drop in Three Weeks to Approximately 1.0650

Daniel Rogers

Dec 16, 2022 12:04

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Early Friday morning, EUR/USD demonstrates minor gains near 1.0640 as it retests the intraday high. As a result, the primary currency pair consolidates the steepest daily fall in three weeks while reversing the previous day's retreat from the highest levels in six months prior to the release of important European and American economic data.

 

The aggressive rate hike of 0.50% by the European Central Bank (ECB) propelled the EUR/USD pair to a fresh multi-day high of 1.0736 on Thursday evening. However, predictions of a recession bolstered demand for the US Dollar as a safe-haven currency, submerging the quotation.

 

In spite of this, the ECB's announcement of a 50 basis point (bps) rate increase met market expectations. However, President Christine Lagarde's comments bolstered the optimistic outlook, as she noted, "Information indicates 50 basis points at the next meeting, probably also at the next meeting, and thereafter." In addition, the ECB announced its intention to discontinue the Asset Purchase Program (APP) via gradual Quantitative Tightening (QT).

 

It should be noted that the typically hawkish rate announcements from the major central banks coupled fears of rising inflation and the energy crisis to amplify recession concerns, allowing the US Dollar to enjoy its role as a safe-haven currency despite contradictory facts.

 

In November, US Retail Sales came in at -0.6% month-over-month, compared to 0.1% expected and 1.3% prior. In addition, manufacturing survey findings from the Philadelphia Fed and the New York Fed were dismal for the relevant month, while Industrial Production declined in November and Jobless Claims decreased for the week ending December 9.

 

In response, Wall Street benchmarks fell and US Treasury bond yields increased, allowing the US Dollar Index (DXY) to notch its highest daily gains in 10 weeks. As traders await the first readings of December activity statistics for Germany, the Euro Area, and the United States, S&P 500 Futures and US Treasury bond yields have been flat as of late. The final inflation figures for the Eurozone will also be vital to track.