The ECB and then the BOC certainly helped equity markets over come some key resistances. The Euro was dumped propelling European equities into breakouts of their recent down trends. Participants were forced to short cover and any late to the bear camp have been “rolled over”. Its worth noting that overall putcall ratios are nearly back to their lows indicating participants are no longer hedging their positions. Although a pull back appears likely here in the near future the medium term remains up. From the medium and longer term perspectives the bull market appears in tact for now, although over bought short term and over due a retrace.
Here the reports:
Firstly the Swiss Team:
And here GS
And here Fitzpatrick
And here LC
And here CS with their coreviews
Finally here the MS fx report.. “Don’t fight the ECB”.
We are overbought short term on risk which at present correlates to over sold on the euro. The euro and Jpy are funding currencies for now not the US$. Euro repatriation on risk off can be sharp, as we saw a month ago.
All the best
Rich