Eurozone Markets Start to Look More Resilient

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Eurozone Markets Start to Look More Resilient

Eurozone Markets Start to Look More Resilient



The risk asset rally continues and investors almost seem to be positioning themselves for a situation where, if things on the global economic front really do improve, we could see even further strength to the upside.

Having said that, yesterday's worse-than-expected US consumer confidence data hardly backs this up considering how poor it was. However, any bad data could also be taken as a bullish cue because central banks will have to continue their ultra easy monetary policy.

Either way, for many investors it seems like a win-win scenario right now.

Even talk of relaxing attitudes towards Eurozone members that are imposing strict austerity is not ruffling investors' feathers, who seem to be becoming more accepting of a slow down in balancing the books.

Bond yields for the worrisome countries such as Spain and Italy have remained low as the overall sentiment towards the Eurozone really has improved. We are even seeing a growing belief that a break up can be avoided since the political will seems to be there.

Just this morning, worse-than-expected Spanish GDP data has proved to have little sway in forcing the markets significantly lower. Although, the major stock indices are opening slightly lower than our pre-market calls and, whilst the euro has remained above $1.3500, it has also retreated a little from its highs.

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By Simon Denham, 30 January 2013


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