News & Analysis

Horrific headlines from the war in Ukraine filtered through to market sentiment at the start of last week, resulting in European currencies declining and crude oil prices rising further as market participants awaited fresh sanctions from the West in response. The developments around the sanctions weighed on the euro and made the single currency the worst performer in the G10 on the week, while in the EM space, European peripheries were hit hard as their domestic economies rely on Russian exports. While the news from Ukraine pushed investors towards safe havens like the US dollar, most of the broad USD strength this week stemmed from rising US yields after the Fed’s Lael Brainard and March’s FOMC meeting minutes confirmed a quicker reduction of the Fed’s balance sheet than in the previous cycle is to come, widening yield differentials between the US and eurozone. Next week’s European Central Bank meeting may change things as hot inflation prints from March put the ECB in a tight corner. On top of the ECB meeting, focus in Europe will be on the results of the first round of France’s 2022 Presidential election as citizens head to the polls on Sunday to choose their final two candidates for the second vote on April 24th. Additionally, markets will focus on rate decisions from the Bank of Canada, Reserve Bank of New Zealand, Central Bank of Turkey and the Hungarian National Bank.

You can read the Week Ahead in full here:



Simon Harvey, Head of FX Analysis
Ima Sammani, FX Market Analyst
Jay Zhao-Murray, FX Market Analyst



This information has been prepared by Monex Europe Limited, an execution-only service provider. The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. No opinion given in the material constitutes a recommendation by Monex Europe Limited or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication.