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Analysts at Nordea Markets explain that a lot has favoured the greenback this year as US data has kept surprising; maybe because of Trump’s sentiment effects, or because of the direct effects from the tax reform and from government spending.

Key Quotes

“US GDP growth expectations have nonetheless been rising as a result. Based on recent ISM/PMI outcomes, this process of  dollar-positive forecast revisions has only started.”

The most recent regional surveys suggest a rebound in the ISM manufacturing number for May, which is also what the consensus is looking for. The rebound in regional surveys can probably be explained by the cease fire in the trade war (as sentiment soared in the Richmond Fed, a trade-dependent region due to harbours). You also have to wonder how much is priced-in. Both the US 10y yield and relative moves in the equity space suggests that  a relatively nice ISM number may be mostly priced-in.”