Sentiment stabilisation cannot mask secular changes
Risk appetite is likely seeking for some consolidation heading into Fed Chair Yellen’s testimony on Tuesday. Amid the (justified) reassurances that the recent moves in ‘highbeta’ markets are merely adjustments rather than outright crises, a conservative script from Mrs Yellen – acknowledging a somewhat soft patch in US data – could present an opening to re-engage risk. While tactically sound, secular changes remain unavoidable.
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