S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico MarketAccording to MUFG’s Derek Halpenny, the ECB’s communication and achievement of its price stability goal leave it in a relatively better position than the BoE, but he is sceptical that higher front-end Euro yields will sustain Euro strength. With DXY correlations shifting from yield spreads to Brent, he continues to see EUR/USD downside risks tied to conflict-related Oil dynamics.
ECB stance offsets but cannot erase risks
“Similar to the GBP view, we are not convinced that the jump in front-end yields will continue to support the euro.”
“The DXY correlation with yield spreads has weakened considerably with a correlation with Brent taking over and hence we continue to see EUR/USD downside risks related to the conflict.”
“The yield dynamic may curtail the scale of drop and indeed the yield spread move was quite different in 2022.”
