Positive Drivers Lacking
Risk was fast out of the blocks on Monday but ultimately there was a failure to consolidate as investors acknowledged that positive drivers were somewhat lacking. Press reports on regulatory developments were initially positive for financial stocks, but this failed to translate into broader gains. Regardless of how investors feel about pro-cyclical regulations, in many parts of the world, even in G10, leverage is either excessive or falling too quickly and damaging growth expectations. Unfortunately, the biggest economies suffer more from the latter ailment, which will drag the overall outlook for global growth for some time to come. Nonetheless, the data calendar is expected to pick up a bit over the coming days and allow markets to seek fresh catalysts for upside, especially as event risk is limited. German factory orders and US consumer credit are due. Sweden will release minutes from the last policy meeting. Overnight EURUSD traded 1.3104-1.3140 and USDJPY 87.23-87.81
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank