In view of Greg Gibbs, Analyst at Amplifying Global FX Capital, investor enthusiasm for Eurozone assets, equity and bonds, may remain weaker than it was earlier in the year when the market was seeing a strong recovery, lifted by global demand.
Key Quotes
“At that time political stability in the Eurozone was not questioned, and there was little concern over trade relations with the US. A rising EUR was considered an essential component of the return from Eurozone assets, and there was much attention on progress in ECB policy towards QE exit.”
“The outlook for Eurozone assets may no longer appear to be so robust. And there are risk elements that point to a possible extension of ECB QE policy, and/or concern that an end to QE policy could unsettle assets in Italy and the periphery.”
“As such, we are more inclined to sell into rallies in the EUR for the time being.”
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