Confidence Despite Silence
Markets remain less than concerned about the lack of agreement from Europe, with the euro actually managing to squeeze higher after the statements from Eurozone leaders on Wednesday suggest that sooner or later the job would be done. With quiet trading likely to dominate for the remainder of the week, there is little appetite in pushing for major event-driven moves and the steady flow of data will probably help ranges stabilise. Risk appetite is also holding well as most indices in Asia trading on a firmer note – though Shanghai is trading lower despite the HSBC Flash Manufacturing PMI returning to expansion territory at 50.4 – the first time in 13 months. This is consistent with our view that China’s economy is rebounding cyclically and it should provide a floor for AUD heading into year end. EURUSD traded 1.2827-1.2867 overnight and USDJPY 82.38-82.58.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank