Forex Flash: Euro bulls run out of momentum – Societe Generale
FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that Europe sees the ZEW survey, the EU FinMin meeting in Brussels and a speech this evening in Frankfurt by Mario Draghi.
There is no negative news out for the Euro at the moment but he feels that it has clearly run out of momentum. Juckes adds that his bias is for further strength in the short term, before economic weakness wears it down, and markets, having been caught out by Draghi's change of tone, will react to any surprise comments today.
Looking to the UK, Juckes notes that public finances data is due today, alongside the CBI industrial trends survey. He writes, "Sterling is still weighed down by the threat of a credit rating downgrade, recession, and fear that the MPC has a GBP-negative bias. None of that is likely to change quickly and further weakness is likely."
Finishing with the US, he sees that the US releases Chicago and Richmond Fed indices, and existing home sales. He feels that most attention is likely to be on the earnings season this week, but overall, the greatest threat to market sentiment is the strength of the rally in US asset prices and in 'risk' generically that tiredness sets in. he finishes by reflecting that, " The news flow is asset friendly - US data are reasonably positive and the Fed is excessively accommodative."
There is no negative news out for the Euro at the moment but he feels that it has clearly run out of momentum. Juckes adds that his bias is for further strength in the short term, before economic weakness wears it down, and markets, having been caught out by Draghi's change of tone, will react to any surprise comments today.
Looking to the UK, Juckes notes that public finances data is due today, alongside the CBI industrial trends survey. He writes, "Sterling is still weighed down by the threat of a credit rating downgrade, recession, and fear that the MPC has a GBP-negative bias. None of that is likely to change quickly and further weakness is likely."
Finishing with the US, he sees that the US releases Chicago and Richmond Fed indices, and existing home sales. He feels that most attention is likely to be on the earnings season this week, but overall, the greatest threat to market sentiment is the strength of the rally in US asset prices and in 'risk' generically that tiredness sets in. he finishes by reflecting that, " The news flow is asset friendly - US data are reasonably positive and the Fed is excessively accommodative."
Free Annual Reports
