EUR/USD, EUR/GBP flows: Tame day; existing home sales remain contained at yield penalty
Contained trade, US existing home sales remain contained as yields rise
A tight day continues, with oil still very contained and barely up a dollar by this point. Gilts having a tougher day perhaps the only thing to see price action wise, though well within the recent low range, and with 10s spiking back to the 5% mark in cash rather than making new ground. EUR/GBP continues to try and lift off the recent 0.86/10 cross base but isn't sustaining that much traction as yet it seems without a stronger fresh catalyst.
Not a big day for US data to start the week. April existing home sales at 4.02m were slightly softer than expected and up only 0.2% from March, though March was revised up. In general, you can continue to see the existing home sale market as suffering from the ‘lock in’ hangover from the 30yr mortgage refi fixes in the pandemic yield lows. With UST yields still pressing the outright highs, US30s sit just off 5%, there remains a very substantial penalty cost for moving which significantly impairs turnover.