Central Bank Divergence

FX/Rates takeaways.

This time last year, G10 central banks began monetary easing after a period where pandemic-induced inflation caused interest rates to rocket higher.

Over this past year, the main contenders (the Fed, ECB, BoE, etc) have broadly followed the same path to policy normalisation. Yet the past month has shown us that divergence in policy moves going forward is becoming more and more likely.

As a result, pockets of opportunity are likely to become more apparent both in FX and rates.