Risk sentiment improved somewhat yesterday, with EU and US indices ending their sessions in positive territory. However, this was proven temporary. After the US close, equity futures turned back down, something that rolled over into Asia. The ECB made no changes to its policy and guidance, with President Draghi repeating that the risks to euro area’s outlook remain broadly balanced, despite the latest softness in economic data.
Investors’ Morale Stays Fragile, ECB Still Sees Balanced Risks
The dollar traded higher against all the other G10 currencies yesterday. The currencies that underperformed the most were the commodity-linked AUD, CAD and NZD, while the safe-haven JPY was the only one which managed to resist the greenback’s strength.
Even though major EU and US equity indices ended their sessions in positive territory, rebounding after Wednesday’s tumble, the FX-performance pattern suggests that the improvement in risk sentiment was just temporary. This is also evident by the Asian markets, which...
Read the full financial markets weekly outlook on JFD Research.