Will global gloom send money into Euros? – SocGen

By FXStreet FXStreet (Delhi) – Kit Juckes, Research Analyst at Societe Generale, notes that in the first two weeks of the year the yen has gained 6% against both AUD and NZD, over 3% against GBP, CNY, SEK and NOK.

Key Quotes

“It can’t maintain that pace all year but we’ll want to stay short Yen vs. a range of currencies (NZD, AUD, GBP, KRW to mention a few) for much of 2016.

EUR/USD has been faithfully tracking the Bind/Treasury yield spread in recent months and the fall in Treasury yields argues that the Euro ‘ought’; to bounce sharply unless Bund yields fall back in line with Treasuries. Given that EUR/USD is basically doing nothing and today’s calendar contains only the account/minutes of the December ECB meeting, there isn’t an obvious catalyst for Euro strength, but I fancy EUR/USD is more likely to break above 1.09 than slip below 1.08 at the back end of this week.

This does tempt me to buy EUR/GBP on any dip today. The MPC will surely do nothing at its meeting, to rates or bond-buying, but ‘Brexit’ talk continues in the press as the ‘out’ camp makes most of the running.

With import prices (still falling) and …read more

Source:: FX Street