Stronger income growth in the US would help everyone
On Thursday, Draghi may have disappointed investors hoping for more forceful rhetoric on FX. Nonetheless, the prior stance on the disinflationary impact of the real effective exchange rate (REER) on inflation should continue to stand. The problem for most central banks is that forcing their REERs down has proven exceptionally hard in this cycle due to weak inflation globally. As ever, hopes for salvation lies with the US. On Friday the Fed’s counterparts will be hoping to see a strong earnings print.
Read the full report: UBS