Euro: Vulnerable to home-grown risks – SocGen

By FXStreet FXStreet (Delhi) – Research Team at Societe Generale, note that after the recently concluded Catalan elections where no party managed to get the majority, the euro even though is benefitting from global risk aversion (a trend we can call the euro’s Japanification), but is vulnerable to home-grown risks.

Key Quotes

“The Catalan election has resulted in victory for pro-secession parties, but they didn’t get 50% of the vote. Secession is not in the constitution and pollsters tell us many who voted for the independence parties really just want a dialogue. Does any of this matter for growth, ECB policy or the euro? So far, the only way you can really see any stress is in the BTP/Bono spread, with Italian bonds out-performing in recent months. It’s hard though, to see anything positive for the euro in the result.”
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Source:: FX Street