Analysts at TD Securities explained that global risks will continue to be driven by divergence, deflation, and debasing.
Key Quotes:
"As a result, the duration grab is alive and well. The sharp deterioration in US data surprises since December is one factor, as is the ECB incentivizing a war of negative rates in Europe and sucking up all net new EGB issuance until 2017, while absorbing 10% of the redemptions to boot."
"In this environment, FX is likely to be the better venue to trade global themes and we see scope for large trends in EUR/USD, NOK/SEK, USD/CAD, and EUR/GBP."
Key Quotes:
"As a result, the duration grab is alive and well. The sharp deterioration in US data surprises since December is one factor, as is the ECB incentivizing a war of negative rates in Europe and sucking up all net new EGB issuance until 2017, while absorbing 10% of the redemptions to boot."
"In this environment, FX is likely to be the better venue to trade global themes and we see scope for large trends in EUR/USD, NOK/SEK, USD/CAD, and EUR/GBP."
