As of the 2026 joint review, Canada is generally less inclined than Mexico to take significant risks in fresh or aggressive USMCA renegotiations, because of differences in economic vulnerability, negotiating leverage, political dynamics, and strategic priorities. As of the 2026 joint review, Canada is generally less inclined than Mexico to take significant risks in fresh or aggressive USMCA renegotiations, because of differences in economic vulnerability, negotiating leverage

Japanese authorities have already launched their most aggressive currency intervention campaign since the dramatic episodes of 2022 and 2024 in 2026. The Ministry of Finance (MOF) has intervened multiple times in the forex market to buy yen and sell dollars – primarily via the Bank of Japan (BoJ) – largely to keep USD/JPY capped near the politically and economically sensitive level of 160. Analysts note that unilateral (non-U.S.-coordinated) interventions tend to buy time rat

The U.S. 30-year Treasury yield has surged to levels not seen in nearly two decades. It briefly topped 5.20% on May 19 — the highest since July 2007 — before easing slightly to around 5.11–5.17%. This sharp move higher in long-term yields is putting immediate pressure on the Nasdaq Composite, the tech-heavy benchmark that has powered much of the U.S. equity rally in recent years. The Nasdaq had shown resilience earlier in 2026 thanks to strong tech earnings (double-digit beat

BoE policy is in a data-dependent holding pattern at 3.75% (unchanged since the Dec 2025 cut). But the market has quietly repriced from “gradual easing” to a mild tightening bias. 50–62 bps of hikes priced by end-2026 (latest OIS reads show ~60 bps as of this week, down slightly from 70 bps post-April MPC but still a sharp reversal from cut-heavy pricing earlier in the year. Catalysts ahead include: June BoE rate decision, May CPI, labor market data, crude oil developments, a

Rising gilt yields are driven heavily by higher term premium from UK political instability (Starmer/Labour leadership crisis after poor local elections, fiscal credibility concerns, potential policy shifts) and sticky inflation risks (energy pass-through from Middle East tensions/oil >$100).Markets interpret this as a risk premium (investors demanding more yield to hold UK debt due to uncertainty), not genuine economic strength. This acts like a “tax” on holding GBP rather th

Front-end volatility tenors are reaching the lowest levels this year; EUR/USD 3m implied vol at 5.7% is close to the bottom of its 5-year range. The same trend is seen in the rest of the G10, as some tenors hit the lowest since 2020. This decline comes after earlier 2026 spikes in volatility (geopolitics, oil shock fears Feb-Mar) but has since reversed on ceasefire hopes, stable central-bank outlooks, and surprisingly low realized movement in major pairs (exactly as in the 1M

Our base case would be that BoJ FX intervention in the current environment can at best put a lid on USD/JPY in the 162/165 area rather than turn the trend. Taking into account high energy prices and Japan running substantially negative real interest rates, plus the dollar being in demand, Tokyo cannot expect a sustained drop in USD/JPY. A joint US-Japanese intervention to sell USD/JPY would be far more significant than solely Japanese intervention. Here, not only would Washin

The US Dollar Index (DXY) has a well documented seasonal tendency to weaken in April and then rebound in May. This opens up a traditional “upside seasonal” window from late April through the end of May, during which the greenback has historically seen positive average returns in most years. The pattern is one of the more consistent in FX seasonality studies and is seen across multi-decade datasets. What's behind the upside? April weakness frequently leaves the dollar oversold

The RBA's Monetary Policy Board increased the target for the official cash rate by 25 basis points to 4.35% (effective 6 May 2026). This marks the third straight 25bp hike in 2026 (following hikes in February and March). Inflation: The headline CPI is now forecast to reach a peak of 4.8% in mid-2026 (higher than in the February projection). The underlying inflation rate (trimmed mean) is expected to remain above 3% until mid-2027, before easing back towards the target band of

Below you will find the historical cumulative performance of a G10FX momentum factor benchmark index during the first quarter of 2026. The benchmark is rebalanced monthly; this quarter it mainly shifted positions in the long leg side of the equation while the short leg ranking held steady. Over the 77 trading periods, the total return was 1.09%, holding onto gains despite the Middle East tensions. Gains above 2.0% were reached before the middle of March, when the strategy pos

RBA pricing has shifted upward significantly (from expected cuts to expected rises), while Fed pricing has shifted sideways or slightly higher (fewer/delayed cuts than anticipated at the start of 2026). Markets price zero to one Fed 25bp cut in 2026, often pushed back to late in the year (e.g., September–December) or priced out entirely post-Iran conflict. Australia faces stickier inflation above the 2–3% target band, driven by strong activity and resource utilization. The US

A continuation of the 2025 weakness in the dollar was seen early this year as the market priced in Fed monetary policy, Trump trade tensions, and geopolitical concerns on Greenland. The war risk premium saw this softness reversed in late February; the dollar got a bid out of safe haven demand and the oil price channel. Our own dollar index shows this reaction function. However, the bid failed to top the early January levels. An alternative measure, the DXY, concentrates weigh

RaboResearch maintains our forecast of the next move in the OCR being a 0.25ppt hike to arrive at the October meeting . We project a follow-up 0.25ppt hike in Q1 of next year to take the OCR up to 2.75% with a high likelihood of more to follow as the RBNZ seeks to shift monetary policy to ‘neutral’, which they estimate to be an OCR of 3-3.25%. RaboResearch maintains a baseline forecast that the Strait of Hormuz will begin to slowly re-open from late April onwards. Even if thi

In the FX market, interest rate differentials have not been the main driver, and EUR/USD expectedly jumped on the news of a ceasefire. We note that even amidst bouts of flight-to-safety, the performance of the USD has been far from stellar, and the conflict in the Middle East has not at least bolstered the confidence towards the dollar in the medium term. We thus continue to expect a clearly higher EUR/USD towards the end of our forecast horizon . - Nordea

The CBOE Volatility Index <.VIX> just delivered one of the clearest macro signals of 2026 so far: a sharp drop below the psychologically critical 20 level. After spiking above 30 amid Middle East tensions in March, the index is set to record the seventh largest two-week decline on record. For FX traders this meant an opportunity to rewrite the book as dips below 20 <.The VIX> are historically tied to a risk-on regime change, where high-beta FX tend to outperform the rest oof

The real driver behind AUD strength is the interest-rate differential. As of April 14, 2026, the 10-year AGB yield sits at approximately 4.93%, while the equivalent U.S. 10-year Treasury yields 4.27%—a spread of roughly +66 basis points in Australia’s favor. RBA rate hikes in February and March (lifting the cash rate above the Fed’s for the first time in years) pushed Australian yields higher while U.S. yields remained relatively anchored or eased on growth concerns. The 2-ye

On average, EMFX has fallen to the U.S. dollar since the Iran conflict started. However, we have seen relative strength playing out as not all currencies share the same commodity/oil dependency status. Playing a long BRL / short TRY is a classic EMFX relative value cross trade. The strategy bets that BRL will outperform TRY, driven by Brazil’s oil exporter stance versus Turkey’s vulnerability as a major energy importer with high inflation and structural pressures. Since the I

Real policy rates — calculated as the latest nominal policy rate minus headline CPI — remain one of the strongest fundamental drivers of G10 currency performance in 2026. The chart below includes data up to April 2, 2026. I continue to see statistical relevance in the Q3 sample. This is beacuse higher (or less negative) real rates tend to attract capital inflows, support carry, and reinforce currency strength, especially during periods of geopolitical stress like the current

The momentum strategy profits from trend persistence and has historically delivered strong risk-adjusted returns in trending, risk-on environments while struggling in choppy or sudden regime shifts. Year-to-date, the factor has posted modest positive returns, estimated in the +3.5% to +6% range net of transaction costs (based on typical bank-published momentum baskets and cross-sectional implementations). Early-year strength came from the continuation of 2025’s USD weakness t

Most G10 yield curves experienced bear flattening: short-term yields (1Y/2Y) rose significantly more than long-term yields (10Y/30Y). UK gilts led the charge with front-end moves of ~+65–72 bps on the 2Y, while the 30Y lagged at ~+32 bps. Germany saw an even more pronounced version: 2Y up ~+43 bps vs. 30Y only +10 bps. This pattern reflected markets pricing in near-term inflation spikes from energy costs, while longer-term growth concerns (potential recessionary drag from hig