Dollar slips as jobless claims fuel Fed cut bets; crypto stumbles, oil steady ahead of U.S. CPI
The dollar eased and Treasury yields drifted lower after a jump in U.S. jobless claims strengthened expectations for Federal Reserve rate cuts, while risk sentiment stayed fragile with crypto under pressure and commodities steady heading into a pivotal U.S. CPI print.
Key points
- The dollar softened and front-end yields slipped as rising jobless claims boosted odds of Fed easing.
- Global stocks were mixed with liquidity thin ahead of the CPI release; FX volatility stayed contained.
- Crypto weakness intensified: DOGE fell around 3% through support near $0.15; XRP slid about 6% on heavy volume despite reports of sizable ETF inflows into the space.
- Italy launched a probe into retail crypto exposure as the market cap approaches $3 trillion, underscoring regulatory risk.
- Shell expanded its Brazil pre-salt footprint in a roughly $343 million deal; high-margin barrels and low costs remain the attraction, keeping oil prices broadly steady.
- U.S. mortgage rates eased toward 6.19%, offering a modest tailwind for housing but with rate volatility still elevated.
FX and rates: softer data nudges the dollar lower
A jump in weekly U.S. jobless claims nudged the dollar lower against major peers and eased front-end Treasury yields as traders added to Fed cut bets. The move was modest—typical of a data-point drift before a key inflation print—but enough to tilt risk appetite away from the dollar and toward rate-sensitive assets. EUR/USD edged higher while USD/JPY backed off recent highs as real yields slipped.
Positioning remains cautious into the CPI report, with options markets implying a pick-up in near-term FX volatility. A softer CPI would validate the recent repricing of the Fed path, potentially extending dollar weakness and flattening the yield curve; a surprise upside print could reverse those moves quickly.
Crypto: sellers in control despite inflow headlines
Crypto markets retraced despite supportive fund-flow headlines. Dogecoin fell roughly 3%, slicing through chart support near $0.15 on heavy turnover. XRP dropped about 6%, breaking a key support area with bears eyeing lower technical levels. Broader majors including BTC, ETH and SOL saw choppy two-way action as traders positioned for CPI-driven volatility and liquidity thinned into the release window.
Regulatory risk also hovered in the backdrop. Italian authorities are probing retail exposure to digital assets as the total crypto market cap approaches the $3 trillion mark, highlighting uneven global oversight and potential consumer-protection concerns. That regulatory overhang, combined with macro uncertainty, is keeping implied crypto volatility bid.
Commodities and energy: Shell leans into Brazil pre-salt
In oil, prices were steady to slightly softer as supply optimism intersected with growth jitters. Shell agreed to boost stakes in Brazil’s pre-salt fields for about $343 million, targeting high-margin, low-cost barrels that can weather price swings. The move underscores a broader industry tilt toward resilient, low-breakeven assets.
For FX, petro-currencies were little changed, reflecting both stable crude benchmarks and a market reluctant to take directional bets before CPI and fresh demand signals.
Housing and consumers: mortgage rates inch lower
U.S. mortgage rates eased toward roughly 6.19%, tracking the pullback in Treasury yields. The incremental relief could support spring purchase activity and refinancing interest at the margin. Still, rate volatility remains elevated as markets toggle between softer labor signals and sticky inflation components. A cooler CPI would likely bolster the trend lower in mortgage rates; a hot print risks snapping it.
What’s next
The CPI report is the immediate catalyst for FX, rates and crypto. Market focus will be on the breadth of disinflation, especially core services ex-shelter. A downside surprise could extend dollar softness and ease yields, while an upside shock may lift the dollar, pressure equities, and spark another risk-off sweep through crypto. Bidding in front of the print looks cautious, with liquidity pockets likely to amplify moves.
FAQ
Why did the dollar dip today?
Rising U.S. jobless claims reinforced expectations that the Fed could cut rates sooner, nudging Treasury yields lower and weighing on the dollar ahead of the CPI report.
How are crypto markets reacting before CPI?
Crypto is under pressure, with heavy selling in select altcoins and choppy trading across majors. Traders are de-risking into the CPI event, keeping liquidity thin and implied volatility elevated.
What does Shell’s Brazil move mean for oil?
Shell’s increased exposure to Brazil’s pre-salt underscores a preference for high-margin, low-cost projects. It supports a stable supply outlook, contributing to broadly steady oil prices ahead of macro catalysts.
Will lower mortgage rates continue?
They could if inflation cools and yields grind lower, but rate volatility remains high. A hotter-than-expected CPI would likely push mortgage rates back up.
How does Italy’s retail crypto probe matter for traders?
It highlights regulatory risk in a fast-growing market. Increased scrutiny can dampen sentiment and raise compliance costs, potentially adding headline volatility to crypto assets.
What should FX traders watch in the CPI print?
Beyond headline and core rates, watch core services ex-shelter. A broad-based cooling would support dollar weakness and lower yields; stickier components could trigger a reversal.
