Here are your top FOX Business Flash headlines.
The euro continued to fall early on Monday, reaching parity with the safe-haven Swiss franc, and commodities of all stripes rose as the Russia-Ukraine conflict showed no signs of cooling.
Meanwhile, the dollar generally strengthened, helped in part by a strong payroll report.
“Given that the potential for stagflation is very real, the ECB is likely to keep its asset purchase program as flexible as possible at €20bn in the second quarter and possibly beyond, effectively pushing back the timing of rate hikes,” said economist Tapas Strickland. in NAB.
CHARITABLE ASSOCIATIONS ARE AFRAID TO DELIVER HUMANITARIAN AID TO UKRAINE
“However, higher CPI forecasts mean that rate hikes are needed on the horizon.”
The near-term outlook for a more dovish ECB, combined with safe haven flows, will send German 10-year bond yields down 32 basis points last week. The US 10-year yield fell 1.69% after already falling 23 basis points last week.
A photograph of US dollar, Swiss franc, British pound and euro banknotes taken in Warsaw on January 26, 2011. REUTERS/Kacper Pempel (REUTERS/Kacper Pempel / Reuters Photos)
Fed fund futures also rallied as the market priced in at a slower rate hike by the Federal Reserve this year, though the March hike is still seen as a deal.
UKRAINE WAR IN RUSSIA CREATED ‘HUGE SUPPLY SHOCK’: WORLD BANK PRESIDENT
As growth prospects in Europe deteriorate, the single currency has suffered a setback and fell 3% last week to its lowest level since mid-2020. It was last down 0.8% to $1.0834 and is in danger of testing its 2020 low near $1.0635.
Euro, Hong Kong dollar, US dollar, Japanese yen, British pound and Chinese 100 yuan banknotes are seen in an illustration taken January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo (REUTERS/Jason Lee/Illustration/File) Photo/Photo by Reuters)
The euro also fell against the Swiss franc and broke below the 1.0000 mark for the first time since early 2015.
Market expectations point to a rate hike by the Fed this month. The dollar index was last at 99.134, up 2.3% last week.
“Events in Ukraine are increasingly putting pressure on the euro,” said Richard Franulovich, head of FX strategy at Westpac.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
“With safe haven flows likely to continue for some time to come and Fed officials keen to advance their policy normalization plans, 100+ for the (dollar index) is just a matter of time.”