Forex/Fixed Income Update
USD came under selling pressure following the better-than-expected Q1 GDP report with the USD Index turning flat after trading higher the entire morning. FED Fund futures are slightly lower and now reflect a 78% chance of a 25bp cut this afternoon.
EUR/USD knee-jerked lower following GDP and has since turned flat at 1.5572. Cable is well-bid at 1.9736 despite a larger-than-expected drop in Apr. UK house prices. USD/JPY is up 0.47% to 104.52 and USD/CAD is down 0.7% to 1.0054.
Bonds are higher across the board with some extended buying into the long end pushing the yield on the 30yr to 4.539%. The 10yr is marginally higher with a yield of 3.8% and the 2yr is flat with a yield of 2.342%. The short end of the curve is completely flat with the 4week yield at 1.27%, the 3month yield at 1.45% and the 6month yield at 1.72%.