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23 Apr 2013
Forex Flash: Europe is flat lining - Kit Juckes
FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that Europe is flat-lining.
He begins by noting that the composite Euro Zone PMI came in flat at 46.5. At the margin, he sees that it is good news that we saw the divergence between Germany and France partially unwound, with German data coming out soft. However, he notes that But the underlying story is that one of the best indicators of what is happening to growth suggests a mild depression continues, getting neither better, nor worse.
Juckes continues to state that there will be debate about whether the ECB will cut rates further, though I doubt that would make any economic difference (except to the very front end of the Euro curve). But the ECB won’t be tightening for a very, very long time indeed! he writes, “Peripheral bond markets continue to rally and that in turn means FX models don’t point to any great danger to the Euro, though I still think a weaker currency is needed, and inevitable if I am patient enough.”
He begins by noting that the composite Euro Zone PMI came in flat at 46.5. At the margin, he sees that it is good news that we saw the divergence between Germany and France partially unwound, with German data coming out soft. However, he notes that But the underlying story is that one of the best indicators of what is happening to growth suggests a mild depression continues, getting neither better, nor worse.
Juckes continues to state that there will be debate about whether the ECB will cut rates further, though I doubt that would make any economic difference (except to the very front end of the Euro curve). But the ECB won’t be tightening for a very, very long time indeed! he writes, “Peripheral bond markets continue to rally and that in turn means FX models don’t point to any great danger to the Euro, though I still think a weaker currency is needed, and inevitable if I am patient enough.”