The familiar situation of falling European sovereign yields, rising European (and global) equity markets, and a depreciating Euro
are all back in play. But for brief event-driven short covering rallies, the Euro
may be in the early stages of reclaiming its role as a funding currency – look no further than the divergence between EURJPY
and global equity markets ( DAX
, Nikkei, S&P 500
) in recent days.