euro europe Markets stocks

Escape From America (European Vacation)

Over the past several months, the rally in the euro quite clearly suggested market participants were pleased to see European political leaders take their first real stride down the road towards fiscal burden sharing. The establishment of the jointly guaranteed European recovery fund (first unveiled in May) marked a watershed moment, even if some critics worry the vehicle represents more slippery slope than path to shared prosperity. Between that, the ECB's decisive action to help shore up the periphery via Christine Lagarde's "flexible" pandemic purchase program, and the flattening of various virus curves, the market's confidence in the common currency and what it represents increased steadily. Of course, the flip side of that is dollar weakness. Indeed, EUR/USD arguably serves as a real-time barometer of disaffection with America's worsening socioeconomic crisis. That crisis (in all its various manifestations) presages prolonged Fed easing, which in turn helps shrink the monetary policy divergence between the US and Europe. "American yield exceptionalism can decline further, most notably via real yields if the Fed stays true to its word of the need for very accommodative po
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