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USDCAD TECHS

Needle Still Points South

US TSYS

Yields Bounce as Equities Make New Monthly Highs

AUDUSD TECHS

Heading North

EURJPY TECHS

Bull Rally Accelerates

COLOMBIA

Economists Survey Raises 2021 CPI Forecast To 4.9%

MARKET TALK
MARKET TALK: Wednesday saw Mizuho note that "the post-Covid bounce-back is in
full swing, but the risk bid is looking toppy given the increasingly uncertain
global backdrop. Right now it is supported by broad liquidity, ultra-low yields
& idiosyncratic factors e.g. exp. for US stimulus & bullish retail investors.
Consequently, we exp. equity markets to grind lower medium term. The Eurozone
has moved in strides (relative to history) in terms of making the bloc a
coherent unit & the EUR a feasible safe-haven. Consequently we exp. peripheral
EGBs to continue to tighten to core, even when the "risk-on" fades, and for EUR
IG credit to outperform US. Meanwhile, duration has good medium-term potential,
particularly as the market comes around to the reality that (1) renewed
lockdowns (likely incomplete ones) are almost a given, and (2) corporate B/S,
which were bad before, now look particularly fragile. A rising wave of corporate
insolvencies seems unavoidable, even while the govts of the world step in. We
hence see duration having good potential, particularly into the late-Summer when
evidence of the rebound's fading momentum will become evident in the data. We
therefore look for ops to buy duration on any near-term weakness."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com