ARTICLE
Bannockburn Global Forex Drivers for the month ahead April 1, 2022 View Online Economic Calendar April 3: Hungarian National Election April 5: Reserve Bank of Australia April 6: National Bank of Poland April 10: French Presidential Election Round 1 April 12: Reserve Bank of New Zealand April 12-16: China Medium Term Lending Facility Rate April 12: US CPI April 13: UK CPI April 13: Bank of Canada April 14: European Central Bank April 14: Bank of Korea April 14: Central Bank of Turkey April 15: Good Friday Holiday April 17: Q1 China GDP April 18: Easter Monday April 18-24: IMF and World Bank Spring Meeting April 19: China 1 & 5 YR Loan Prime Rate April 22: US April Flash PMI April 24: French Presidential Election Round 2 (Runoff) April 26: National Bank of Hungary April 28: Bank of Japan April 28: Central Bank of Sweden April 29: Eurozone April Preliminary CPI April 2022 FX Outlook Russia's invasion of Ukraine and the unprecedented sanctions and private sector decoupling are unleashing forces that slow growth and exacerbate price pressures. As a result, the geopolitical crisis has become a key force shaping the economic climate. Commodity prices, energy, metals, and foodstuff have skyrocketed. The public health crisis in Europe, the US, and Canada is easing, but parts of Asia are still in a highly contagious vortex. The shuttering of economically large parts of China is weighing on growth and threatening to disrupt supply chains. US and European equity indices sold off for the first two months of the year but stabilized and rebounded last month. However, the MSCI Asia Pacific Index fell for the third consecutive month. Official comments from China seemed to signal a significant policy shift and spurred some buying, but the CSI 300 still fell nearly 8% in March. Helped by a weaker yen, which bolsters the value of foreign income (not only profits, but coupons, dividends, royalties, profits, and licensing fees) more than exports per see, helped lift the Nikkei by almost 5% to lead the G7 equity markets. Equities performed well in the face of the sharp jump in yields. The 10-year Treasury yield rose 50 bp in March, the most in six years, to finish slightly below 2.35%. European benchmark yields mainly were 30-40 bp higher. The dollar value of the negative-yielding bonds in the world (Japan and Europe) fell below $3.0 trillion, the least in six years. It stood at $11.3 trillion at the end of last year. Germany's 2-year yield briefly rose above zero for the first time since 2014 but finished March with a negative yield of a little more than seven basis points. Even at this late date, one still has to pay Portugal, among others, for lending to it for two years. Click here for the full monthly outlook