Major Overnight Headlines
* Euro Area Sept. current account surplus narrows as goods & services imports outpace exports, income falls
* ECB’s Mersch: ‘no final decision yet’ on treatment of govt. bonds in AQR, could be given a ‘zero’ risk-weight
* 69 Chinese cities see annual house price rises in October, unchanged for the 6th straight month
The full thrust of Mersch’s comments on the treatment of government bonds in the impending Asset Quality Review (AQR) may have been ‘lost in translation’, so it’s not entirely clear yet where we are heading with this. Still, there are at least three potential ‘negative’ factors for the EUR and/or credit spreads which continue to evolve here.
Read the full report: FX Daily
BMO