Yujiro Goto, Research Analyst at Nomura, notes that the economic momentum slowed in Q1 globally as the recovery from that had been limited just until recently, which likely amplified the negative impact of trade war concerns on risk sentiment.
Key Quotes
“This seasonal pattern of weaker Q1 growth has been typical over the past five years. Reasons behind the seasonality are not clear, but economic data have been improving globally again now.”
“The slowdown in the euro area and the UK has been particularly significant this year, but the data surprise index in Europe has recently started recovering.”
“Barring further significant escalation in trade war concerns, in the near term, improving economic data should support risk sentiment and hence yen-crosses.”
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