Europe: In a period of continued weakness and pervasive uncertainty
Those words are Mario Draghi’s who as Governor of the European Central Bank is well qualified to use them. European interest rates will not rise before 2020 and a cheap funding scheme for banks will be re-launched aimed specifically at Spanish and Italian banks. Apart from the obvious which is that Spanish and Italian banks are most in need of assistance, the reason for this is the degree of exposure to those banks by the rest of the Eurozone’s banks: expect the words Contagion Risk to become a regular feature in the next 6 months. European growth has been forecasted down to 1.6% for 2020 and 1.1% for 2019. Both look optimistic. EUR has weakened considerably as have European stock markets last week.Â
Weaker US employment data gave markets pause for thought at the end of last week. However the Dow closed only slightly lower at 25,450 and EUR/USD was also unchanged from the previous close. In the UK with further political uncertainty and Conservatives threatening to turn more against each other, GBP continues to slip against both USD and EUR. Gold slipped to $1299. Oil steady at $56. This is a big week for UK plc and markets are alert to each and every piece of news on Brexit developments.Â
Buckle up!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Japanese Yen
Humphrey Percy
Fri 26 Apr 2024
Japanese Yen With JPY at a new 34 year low versus EUR, the market is set for an ambush by the Bank of Japan if it acts today at the end of their Policy Meeting to support the Yen. The reason that the market is susceptible is because it has convinced itself that the BoJ […]
Morning Brief – Too soon to call USD lower
Charles Porter
Thu 25 Apr 2024
Too soon to call USD lower Those following the US Dollar’s performance in the markets would have noted a recent downturn accelerating as this week has progressed. There have been two factors driving this sell-off but it is far from certain that either may endure long enough to push the Dollar index back to its […]
Morning Brief – Milan, Italy
Humphrey Percy
Wed 24 Apr 2024
Milan, Italy The City of Milan has a late night noise problem and so it has acted unilaterally to resolve it-Italian style. A ban on the sale of take away food including ice cream and pizza after midnight is being imposed to protect the “peace and health of residents.” Here in the UK late night […]
