Credit Agricole CIB Research discusses its expectations for next week's FOMC policy meeting.
"Starting with the Fed, ahead of the meeting, rates markets are already fully pricing in three 50bp hikes in May, June and July. We doubt the Fed would want to rock the boat too much by signalling more aggressive QT and believe that a lot of Fed-related positives are in the price of the USD ahead of the May policy meeting," CACIB notes.
"That said, the USD remains an attractive safe haven, and the Fed’s hawkish stance can continue to undermine risk sentiment. In addition, the upcoming US data could remain robust and keep the USD’s rate advantage in place," CACIB adds.