 Yen and Dollar were the biggest winners last week on worsening inflation outlook, dovish central banks and falling treasury yields. Australian Dollar was the weakest one as CPI just rose 1.3% yoy in Q1 versus expectation of 1.5% yoy. The added heavy weight to the case of RBA rate cut later in the year. Euro was the second weakest as German Ifo business climate dropped again to 99.2 in April. Comments from ECB officials also suggested that interest rate could be held at current level way beyond end of 2019. BoC also dropped tightening bias and expected to keep interest rate below neutral at 1.75 for longer. But Canadian Dollar just ended mixed. Economic data from US were generally solid, including March durable goods orders. Q1 GDP expanded strongly by 3.2% annualized, versus expectation of 2.2%. Some economists were quick to point out that growth was largely driven by temporary factors like inventory build. The details were as strong as the headline suggested. But they were not bad a set of numbers. Except that, core PCE dropped to 1.3% only, way below Fed's target of 2.0%. Overall, while last week's data from US indicated the economy remain in good place. Low inflation could just keep Fed's interest rate policies unchanged for longer, but probably not as long as ECB. It's premature to call for a rate cut despite political pressures from Trump's administration. Also, federal funds rates are now considered in neutral rate, while monetary policy of other major central banks remain accommodative. There are even prospects for rate cuts like RBNZ and RBA. The situation will remain Dollar supportive ahead. Though, Yen has the prospect to outperform further on falling yields. The string of upcoming economic data will be important to solidify the current outlook. US will release March PCE inflation, April ISM indices and non-farm payrolls. There is also prospect of more Dollar strength should Fed chair Jerome Powell dismisses the chance of rate cut in the post FOMC press conference. Eurozone GDP will confirm how deep the slowdown was in Q1 while CPI will also be featured. China April PMIs will be watched to confirm if positive signs in March were just seasonally affected false dawn. New Zealand employment and Canada CPI would be market moving. UK will release PMIs and and BoE rate decision but they could be shrugged by the markets. | 
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