Deutsche Bank: If Waller avoids sending policy signals, arbitrage opportunities will arise

George Saravelos, Global Head of FX Research at Deutsche Bank, stated that Federal Reserve Chair Kevin Walsh aims to "avoid commenting on this year's monetary policy as much as possible, thereby minimizing the impact on market pricing." If Walsh manages to do this, the US dollar is likely to weaken, and "the path for summer carry trades will be fully opened." In a report sent to clients on Wednesday, Deutsche Bank noted that as the limited impact of the Iran war on markets gradually fades, "it is hard not to be bullish" on risk assets. The institution pointed out that since last year, global economic growth forecasts have remained virtually unchanged, and this resilient outlook for growth "is not a particularly bullish signal for the US dollar." Deutsche Bank also believes that, with regard to the potential for upward revisions to growth expectations over the coming months, Europe "has the greatest potential."