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EUR/USD: Bearish bias with energy shock repricing – Societe Generale

Societe Generale’s Kenneth Broux highlights that soaring energy prices and Dutch gas strength are weighing on Euro sentiment, keeping EUR/USD under pressure. The bank notes that rate differentials are not driving the pair, with the focus instead on growth risks from higher Oil and gas. Market pricing now implies two ECB hikes by December, with an 84% probability of a first move in June.

Energy-driven downside pressure on Euro

"In FX, energy and nat gas (+30% at market open) means the bias for EUR/USD remains bearish near term. Rate differentials are not a factor"

"The implied probability of a first rate increase by the ECB in June is now 84%."

"ESTR pricing two hikes by December, 84% probability of first increase in June."

"Council member Schnabel stated the obvious but did not comment on the rate outlook: an energy shock would make inflation deviate from target, the question is if oil price rises are more persistent."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Mexico Core Inflation registered at 0.46%, below expectations (0.47%) in February

Mexico Core Inflation registered at 0.46%, below expectations (0.47%) in February
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Germany: Industry stuck in sideways pattern – Commerzbank

Commerzbank’s Senior Economist Dr. Ralph Solveen notes that German industry remains weak, with January industrial orders dropping sharply after earlier distortions from big ticket defense and public-sector contracts.
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