Sharply lower USD on expectations of dovish Fed minutes

The USD is weakening quickly, as market participants expect the minutes of the last FOMC meeting to confirm the Fed’s willingness to tolerate a temporary surge in inflation. US equities posted losses for the second day in a row, but the bond market remained rather unchanged, with the US 10y around 1.64%. UK price data released this morning showed the inflation rate more than doubled in April, in line with expectations, but strong PPI figures point to further acceleration. Non-essential shops, cinemas, museums and café and restaurant terraces reopen today in France.