The eurodollar futures market, which tracks short-term U.S. interest rate expectations over the next few years, is betting on a roughly 80% chance of a rate increase from the Federal Reserve by December 2022, after the release of stronger-than-expected inflation data. That was roughly a few months earlier than what the market previous estimated. Eurodollar futures contracts expiring by December 2022 showed an implied yield of 43 basis points in the afternoon session, equivalent to an 80% chance of a hike. Meanwhile, eurodollar futures contracts between March to June 2023 showed a 100% chance of a 25 basis-point hike by the Federal Reserve. The market sees a total of three hikes by December 2023.
BOJ Kuroda warns of economic risks from spike in COVID-19 cases, new curbs
Bank of Japan Governor Haruhiko Kuroda on Thursday pledged to maintain steps to cushion the blow from the COVID-19 pandemic,
warning that risks to the economic outlook were skewed down amid a resurgence of infections and new state of emergency curbs.
Kuroda also reiterated that the BOJ will take a balanced approach to policymaking as it considers the side-effects of prolonged
easing, such as the damage excessive falls in super-long bond yields could inflict on pension funds' margin. Kuroda stuck to the view
the world's third largest economy was picking up momentum thanks to robust exports and output. Japan's economy is likely to have
suffered a contraction in the first quarter and analysts expect any rebound to be modest in April-June.
UK house price gauge hits four-decade high – RICS
A measure of British house price inflation hit its highest level in four decades in April as buyers raced to take advantage of an
extended tax break just as sellers retreated from the market, a survey showed on Thursday. The Royal Institution of Chartered
Surveyors' gauge of house prices jumped in April to +75, its highest level since the 1970s, from +62 in March. Other indicators have
also shown that a surge in the housing market was given fresh momentum by extending temporarily a cut to a tax on property
purchases. RICS said new buyer demand was positive across every region for the first time this year. But new instructions from
owners looking to sell slumped to -4 from +21 in March.
Dollar Up, Boosted by Higher-than-Expected Consumer Prices and Rising Yields
The 10-year government bond yield (interpolated) on the previous trading day was 1.77, +0.00 bps. The benchmark government
bond yield (LB31DA, 10.5 years) was 1.805, -3.00 bps. LB29DA could be between 1.78-1.84. Meantime, the latest closed US 10-
year bond yields was 1.69%, +5.00bps. USDTHB on the previous trading day closed around 31.10 Moving in a range from 31.28-
31.34 this morning. USDTHB could be closed between 31.29-31.37 today. Meantime, The dollar was up on Thursday morning in
Asia as rising U.S. Treasury yields and a bigger-than-expected rise in U.S. consumer prices accelerated fears about runaway
inflation and lent support to the U.S. currency.
Sources : Bloomberg, CNBC, Investing, CEIC
