12 May 2015
EUR stands to remain supported by the repricing of fixed income market – JPM
FXStreet (Barcelona) - Paul Meggyesi, FX and Rates Strategist at J.P.Morgan, shares the macro trade recommendations, suggesting holding a basket of EUR longs vs. USD and GBP.
Key Quotes
“The fixed income sell-off assumed disorderly proportions at times this week, which increases the cross-currents at work in the FX market, albeit payrolls ultimately helped to smooth the waters.”
“A further euro-led repricing of fixed income would offer further support to EUR (less QE-hysteria, greater recognition of the absolute and relative improvement in the region’s cyclical momentum). Hold a basket of EUR longs (vs USD, GBP and BRL).”
“But greater pressure on bonds which feeds into equities would shift the dollar dynamic from broadbased correction to a more selective pair-wise performance that divides along current account and positioning lines.”
Key Quotes
“The fixed income sell-off assumed disorderly proportions at times this week, which increases the cross-currents at work in the FX market, albeit payrolls ultimately helped to smooth the waters.”
“A further euro-led repricing of fixed income would offer further support to EUR (less QE-hysteria, greater recognition of the absolute and relative improvement in the region’s cyclical momentum). Hold a basket of EUR longs (vs USD, GBP and BRL).”
“But greater pressure on bonds which feeds into equities would shift the dollar dynamic from broadbased correction to a more selective pair-wise performance that divides along current account and positioning lines.”