RBC Capital Markets

Day ahead: There are rate decisions in Sweden and Hungary. Riksbank is expected to keep rates unchanged, with the forward guidance likely to maintain the projected repo rate path at zero over the forecast horizon. In Hungary, the central bank is also expected to keep rates unchanged. The NBH is likely to repeat that they are ready to act if needed in response to “an increase in upside risks to inflation” though also reiterate that they view the expected rise in headline inflation in Q2 as temporary and their main focus is on core inflation excluding indirect taxes and inflation expectations.

Data wise, Q1 CPI, weekly payrolls, and the preliminary March merchandise trade balance are out in AU (see AUD). In the US, April Conf. board consumer confidence & Richmond Fed mfg indices are out (10:00 ET). Additionally, earnings releases continue, including Alphabet and Microsoft.

Citi

The BoJ overnight did little to move the market, holding policy steady as expected. Instead USDJPY, and the majority of the FX complex too, have reflected a stronger USD in Asia hours. There have not been any stand-out headlines to drive this, with this likely instead reflecting the market taking a breather around key levels in a number of pairs (GBP, AUD and EUR in particular). The April FOMC and President Biden’s latest fiscal announcement also move into view, keeping players cautious too.

Nonetheless, the market remains short USD overall, with CitiFX Quant’s preliminary month-end rebalancing estimate also showing a greater than average USD selling need this month.

In the meantime, data today sees a SEK rate decision (hold) in G10, along with a HUF rate decision in EM (hold). Otherwise we await USD consumer confidence and BRL inflation data.

USD: Weakness continued overnight in NY hours, however, the market has retraced some of the move in Asia, taking a breather. Equities in contrast hold steady with S&P futures seen flat since the NY close around 4180 at the time of writing.

Natixis

The dollar hovered near multi-week lows versus major peers on Tuesday, weighed by subdued Treasury yields ahead of the Federal Reserve's policy decision this week, while the yen hardly budged after the Bank of Japan kept its policy on hold.

The safe-haven greenback was also out of favour after world stocks started the week hitting a record high, amid increasing investor confidence in a rapid global recovery from the pandemic.

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