USD: Relative spreads unchanged - MUFG

Derek Halpenny, European Head of GMR at MUFG, suggests that they do not see any major fallout from the dollar from this FOMC decision given market pricing indicated strong expectations of this outcome.

Key Quotes

“The yield curve has shifted modestly lower at the longer end in response to the Fed’s indications of a lower neutral rate but the 2-year UST bond yield is unchanged and nominal yield spreads for all the major currency pairs are unchanged. Our real yield spread model for EUR/USD continues to point to downside risks, which at the least will continue to act as an anchor against any upside momentum.”