FXStreet (Edinburgh) - Lars Christensen, Chief Analyst at Danske Bank, underlines the better tone in the risk appetite.

Key Quotes

“ECB-chief Mario Draghi’s relatively dovish comments helped lift the sentiment in the global markets yesterday and both the US stock market and the European markets in general ended higher. In the US the S&P500 for the first time ever traded above the 2000 line”.

“However, this morning the Asian stock markets in general are trading a bit lower – ahead of the crucial meeting between the presidents of Russia and Ukraine in Minsk later today”.

“On Monday Ukrainian president Petro Poroshenko dissolved Ukraine's parliament and announced parliament elections on 26 October”.

“In the currency markets the dollar continues to rally, while the euro continues to decline on the back of continued nervousness about the Ukrainian situation and hopes that the ECB finally will act to curb deflationary pressures in the currency union”.

“The yen also traded a bit stronger this morning – a bit of risk aversion is likely to return overnight”.

“In the bond markets the difference between US and German yields continues to widen –particularly in the short-end of the curve, as investors continue to bet on the divergence of monetary policy in the US and the euro-zone”.

“Hence, interest rates are moving closer in the US, while deflationary pressures and a more dovish ECB are pushing down the short end of the European curve. Hence, the difference between 2-year government bond yields in Germany and the US is now the biggest since 2007”.

“The dollar rally versus the euro obviously has to be seen in light of this”.

Related Articles
  1. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  2. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  3. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  4. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  5. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  6. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  7. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  8. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  9. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.
  10. Investing Basics

    The Risks Of Buying Bitcoin

    Virtual currency is probably here to stay, but what about Bitcoin specifically? Does it have a first-to-market advantage? What are the risks involved?
RELATED TERMS
  1. No results found.

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!