Global markets are still in limbo amid high volatility in anticipation of the continuation of the process of raising interest rates by the Fed, as well as the start of the cycle of raising the cost of borrowing in the eurozone.

Today, the focus will again be on the expected speech of Lagarde, as well as the publication of the Fed's May minutes on monetary policy.

What will the markets expect from these two most important events?

Recall that earlier this week, the head of the ECB has already made it clear in her blog on the regulator's website that the start of the cycle of interest rate increases may begin by the autumn of this year. And today the markets will again closely follow the topic of her speech, trying to understand for themselves when the bank will start raising rates and at what pace. If the timing is at least more or less clear, then what their pace will be - not yet. Yesterday, a member of the ECB Governing Council and the head of the Bank of Latvia, M. Kazaks, said that the regulator does not rule out the first increase by 0.50% at once. This news again supported the euro exchange rate, and the EURUSD pair tested a local maximum of 1.0750.

And if Lagarde also takes a tougher, "hawkish" position today and makes it clear that the first increase in the key interest rate may be by half a percentage point at once, we should expect a new spurt of the euro up. Here, even the publication of the Fed's May minutes may not deter the strengthening of the euro against the dollar. Such dynamics can be observed if the protocol does not show something new in the prospect of a change in monetary policy. If it presents everything that has already been voiced earlier in the speeches of Powell and his colleagues at the Central Bank, then the market is unlikely to have a reason to resume broad sales again, because all these statements and hints have already been taken into account in prices both in the stock markets and commodity assets and in the foreign exchange market.

By the way, the slowdown in the growth of the dollar is explained not only by its significant technical overbought as a safe-haven currency but also by the shift in market focus towards the behavior of US Treasury government bonds. And there an interesting picture is noted.

Since the end of the first decade of this month, government bonds have become noticeably in high demand, and this is although the Federal Reserve has begun a cycle of rate hikes. An increase in the price of bonds leads to a decrease in their yield, which means that with simple arithmetic calculations, it becomes clear that the purchase of these benchmark securities is not made to earn but to keep the main one in conditions of high risk of recession in America. And this picture directly affects the dynamics of the dollar already. The fall in the yield of the treasury puts pressure on its rate.

That is why we believe that at the moment the US currency has no chance to continue the rally in the Forex market. Most likely, on the contrary, it will be possible to see the weakening of the ICE dollar index and the continuation of the recovery of other major currencies that have become very cheap against the US currency. This means that the trading strategy of selling the dollar on growth can be fully effective.