This via Nomura on the euro
- We find more compelling macro and flow reasons for a move towards 1.10 to be on the horizon, it’s only a matter of time.
- Credit spreads suggest EUR / USD is likely to be much lower (below 1.10) and currencies continue to catch up. A global slowdown generally benefits the USD.
- German new orders are down and with China’s slowdown as well, it’s hard to see why European growth should outperform.
- The euro area’s long-standing trade surplus is down sharply, unlike last year when it was on the rise. In addition, there is the additional uncertainty regarding the increase in Covid-19 cases, a new variant of Covid-19 and restrictions.
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