Forex Forecast
UBS Morning Adviser America
Sentiment Steady European trading was relatively calm overnight. Data and news were light, but the limited releases were still positive for sentiment. The RBA kept the cash rate steady at 3.5% overnight in line with consensus, noting that “material easing” had already been delivered by earlier cuts.
EU policy support delivered – implementation risks weigh
While the EU Summit produced relatively far reaching results, their implementation remains uncertain. Positively, the vicious circle between state and bank risk will be at least partly restricted once the ESM becomes fully operational and EU banks can be recapitalized directly from common rescue funds.
UBS Morning Adviser Europe
RBA On Hold The RBA kept the cash rate steady at 3.5% overnight in line with consensus, noting that “material easing” had already been delivered by earlier cuts.
UBS Morning Adviser Europe
Euro Slipping Already Risk assets – including the euro – had an impressive rally on Friday, and the question now is to what extent those gains can be sustained, and for how long.
UBS Morning Adviser Asia
EU Takes A Step Forward The EU Summit last week ended with the leaders making limited progress in three key areas. First there is now a clear intention to use the Eurozone’s bailout facilities to buy sovereign bonds in the secondary market.
Pre ECB: What’s next, Mr. Draghi?
ECB MEETING 05 JULY – EXPECTED OUTCOME ECB monetary policy strategy: Unchanged ECB policy interest rates: Unchanged Economy: Downside risks predominating Inflation: Decelerating slowly
UBS Morning Adviser America
Rally Holds (for now) Risk assets staged a strong rally overnight following policy announcements released from the EU summit. We remain fairly skeptical over the finer details however and look to fade some of the moves.
UBS Morning Adviser Europe
Summit Exceeds Expectations The euro surged over 150 pips overnight after the EU summit produced several euro-positive surprises. First, it appears the EFSF could soon begin to buy Italian and Spanish sovereign bonds in the secondary market.
UBS Morning Adviser Asia
No Summit Surprises The ‘growth and jobs’ agenda was the focus of Day 1 of the EU Summit, and on that score, the EU leaders delivered what had been widely expected – a EUR10 bn capital boost for the EIB; project bonds; and a EUR120 bn growth package.
UBS Morning Adviser America
Summiteers Arrive Presidents, prime ministers, and their ministerial delegations have converged on Brussels for the two-day EU Summit which is just about to begin.
UBS Morning Adviser Europe
EU Summit To Begin Risk appetite continued to improve modestly during the Asia session despite any concrete news to justify the moves. The Nikkei-225 is up 1.3% at the time of writing, despite a modestly stronger yen.
UBS Morning Adviser Asia
Summit Watch Risk appetite remained resilient heading into the EU Summit, with the equity markets in Europe and the US gaining on the back of positive economic data and hopes of policy stimulus.