Dollar Slides After Goldman Capitulates, Pulls March Rate Hike Forecast

So what if any impact did Goldman's rate call change have on the market? A quite profound one, because while equity futures were sliding and 10Y yields lower on the session, pushing the dollar index to session highs early in the overnight session, moments after Goldman's note hit, the Bloomberg dollar index tumbled to session lows...

... while the Euro spiked, largely as a result of the sharp repricing of Fed vs ECB rate hike odds in 2019, because one look at Euribor vs Eurodllar 2019 calendar spreads, shows that suddenly the odds of a rate hike by the ECB are higher than those in the US! In other words, after a violent repricing in the past month - largely thanks to Powell's recent comments and continued disappointing economic data out of the US - the market now sees the ECB as more hawkish than the Fed in 2019.

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Gary Anderson 1 year ago Contributor's comment

Well, maybe the ECB can avoid tariff wars and keep zero growth humming. Lol. But I doubt it.