EUR At Peak Pessimism?

Why we feel the risk/reward is skewed in favour of the Euro.

Since the beginning of October, EUR/USD is down 8.6%. Over the same time period, the 2yr Bund yield is up flat, with the Euro Stoxx 50 up 5%.

So, which asset best reflects the fundamental situation of where the EU finds itself? Of the moves, we’d argue that the currency’s performance reflects an overly pessimistic view.

We perform a health check on the EU economy, central bank stance and how FX has potentially moved out of step with this, as well as providing risks to a relief rally (TARRIFF MAN IS BACK).