The story of the past week has been the resurgence of the euro and the nascent return of risk appetite. The euro is poised to rally to resistance at US$1.3250/EUR, although we would be cautious at that stage. Interestingly, the euro has rallied as anticipation has grown surrounding ECB (European Central Bank) and multilateral assistance… [Read more]
The title of a recent Business Monitor International report highlights the view that the eurozone is expected to muddle through. However, as Bruce Jeffery, Global Markets Strategist at Business Monitor, explains, a resolution to the ongoing sovereign debt debacle will require a crisis of epic proportions. While implausible at this juncture, alternative scenarios cannot be… [Read more]
Regular readers will be familiar with our increasing concerns about the eurozone, as outlined in Monday’s blog post. Following an extraordinary session of Business Monitor International’s Politburo Standing Committee (in this case our Europe and Global Analysts), we outline our core views on the eurozone debt crisis: Policymakers will take the necessary steps to prevent… [Read more]
In BMI’s view the eurozone question has become the most central issue in global macroeconomics. The US data picture is mixed at best, to be sure, but the case for a recession is not entirely clear cut – certainly not as clear-cut as it was in 2008. But we would almost guarantee a US double-dip… [Read more]
The positive news surrounding the Greek debt situation has lifted the euro close to the important US$1.4500/EUR resistance level. Any break above this point would set up a possible move to the May high of US$1.4900/EUR. Interest rate differentials are clearly supporting the euro. The June 2012 euribor future has traded lower on the back… [Read more]
The EU-wide bank stress test results released on July 15 offered little reprieve for financial markets as concerns over the eurozone sovereign debt crisis continue to dominate. At the heart of the stress test scenario is the ‘adverse scenario’, in which the euro-area economy contracts 0.5% in 2011 and equity markets fall 15%, while banks… [Read more]
Although equities sold off in the wake of US Fed Chairman Ben Bernanke’s comments to the International Monetary Conference in Atlanta, my colleagues and I see little evidence of any change to the Fed’s overall outlook. Bernanke reiterated the FOMC’s expectations that higher headline inflation would prove a transient phenomenon; that the labour market was… [Read more]
