Biden Tax Proposal triggers RiskOff Sentiment

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Rates as of 0500 GMT

Market Recap

Not much movement in the FX world overnight.

EUR was particularly quiet, given that there was a European Central Bank meeting yesterday you wouldnt know it by looking at the rates. Thats because the policy statement following the meeting was largely unchanged and the press conference waswell, just kind of confusing. The meeting was described as an intermediate assessment of the faster purchases in the ECBs Pandemic Emergency Purchase Program PEPP. It had been assumed that the ECB would only reassess the pace of their purchases at the quarterly meetings when staff forecasts are updated, but if theyre going to have intermediate assessments, then they can do it at any meeting. In any case they didnt give any hint of whether the faster pace of purchases is likely to be maintained when they do make the first formal assessment in June, so there was no big impact.

Now attention will turn to next weeks Fed meeting, which Ill discuss in my Weekly Outlook later today. Summary I dont expect any change in policy or stance there, either, only some reassessment of the economy perhaps a more optimistic outlook based on the recent improvement in the data. They have a long way to go before we see a string of good nonfarm payroll figures.

Speaking of employment data, yesterdays US initial jobless claims were much better than expected for the second week in a row. They fell 29k instead of rising 34k as expected economists had expected some mean…

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