29 May 2014
EUR extends the bearishness - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, remarks the ongoing downside momentum in the EUR.
Key Quotes
"Happy Ascension Day. Most of Europe is off, markets are quiet, but the Euro, as well as Treasury yields, are descending rather than ascending."
"10-year Treasury yields have fallen almost 40bp in a pretty straight line since the start of April. A sign of slowing growth or a sign of bad positioning and the gravitational pull of zero rates?"
"We lean to the latter view and so do emerging market bonds and global equities, on the whole. 5-year Turkey lira bonds are down over 1%and the EMBI spread is 20bp tighter over the same period."
"The FX market response to the move though, has been more tentative. We expect FX to catch up and money to flow into higher-yielding FX, which may mostly mean EMFX (TRY can catch up with TRY bonds, for example), but can support AUD, CAD and NOK in G10."
Key Quotes
"Happy Ascension Day. Most of Europe is off, markets are quiet, but the Euro, as well as Treasury yields, are descending rather than ascending."
"10-year Treasury yields have fallen almost 40bp in a pretty straight line since the start of April. A sign of slowing growth or a sign of bad positioning and the gravitational pull of zero rates?"
"We lean to the latter view and so do emerging market bonds and global equities, on the whole. 5-year Turkey lira bonds are down over 1%and the EMBI spread is 20bp tighter over the same period."
"The FX market response to the move though, has been more tentative. We expect FX to catch up and money to flow into higher-yielding FX, which may mostly mean EMFX (TRY can catch up with TRY bonds, for example), but can support AUD, CAD and NOK in G10."