Market activity picked up early in the week as the strong performance of U.S. manufacturing drew attention. The latest ISM report exceeded expectations, showing strength across key indicators including new orders, production and employment. This positive momentum has driven US yields higher, reflecting increased investor confidence.
In the currency area, the US dollar showed notable strength, especially against European currencies within the G10 basket. Emerging markets saw volatility, with the Brazilian real bearing the brunt of the dollar's sharp rise. In Asia, the Thai baht faced pressure and hit new highs against the dollar, although movements remained relatively calm.
US data
Expectations for the release of Eurozone data rose after disappointing HICP figures from Italy and France. Forecasts suggest March numbers will be down year-on-year, setting the stage for potential market changes. Uncertainty loomed over the euro's movements amid differing interest rate outlooks between the euro zone and the US Federal Reserve.
Looking ahead, the European Central Bank's planned policy rate cut in June will further complicate the euro's trajectory. Despite the resilience of economic activity and economic indicators in the euro area, the euro has struggled against a strong US dollar and remains near year-to-date lows.
euro dollar 1 hour chart
In emerging markets, the AKP's performance in Turkey's local elections attracted attention and expectations were high. Despite initial concerns, President Erdoğan's recognition of the election results and efforts to stabilize the economy have provided some reassurance. Analysts expect capital inflows could rise again, supported by the government's efforts to stabilize inflation through consistent economic policy.
Each development shapes the landscape of opportunities and risks. The coming weeks are expected to be full of twists and turns, with each data and policy decision playing a pivotal role as investors navigate uncertainty.
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