Pressure Points, Negative Rates and the Fading Risk Rally – Danske Bank
Pressure Points, Negative Rates and the Fading Risk Rally – Danske Bank
Research Team at Danske Bank, suggests that the pressure points are
building in financial markets after 1.5 months of risk rally.
Key Quotes
“Since
the G20 meeting in February, the extraordinarily dovish rhetoric from
the Fed and policy easing from the People’s Bank of China (PBoC) and the
ECB have supported markets, while the global industrial production
cycle has stabilised.
The March PMI Manufacturing for the US,
Eurozone, UK, China, India, Brazil and Korea all rose versus February
where only truly underperforming economies such as Japan and Russia saw
PMIs falling. On the face of it, China’s FX reserves for March also rose
to USD3,213bn from USD3,202bn previously. But this is due to the fall
in the USD in the month.
Indeed, we estimate that the PBoC
intervened more in March than in February. As such, the rally in risky
assets appears tired and exhausted as new catalysts are needed for the
rally to extend.”
(Market News Provided by FXstreet)
