FX Hedging: A Hidden Risk for Eurozone Equities

With a synchronised recovery in economic activity underway, memories of the 2015-2016 deflation shock fading and a slew of benign election results (Dutch, French and German), confidence in the euro area has improved markedly since the beginning of the year and has...

Financial Balkanisation of the Eurozone

Convergence in core-periphery sovereign credit spreads since 2012 would seem to vindicate the raft of monetary easing measures deployed by the ECB to stabilise the eurozone. This is only half the story, and the other half is decidedly negative. The eurozone collapse...

EUR: Tactically Overbought; Macro Headwinds

Macro headwinds are building up for long EURUSD positions in addition to signs that EURUSD is becoming very overbought technically. A few weeks ago we noted that EURUSD sentiment was one of the most bullish (contrarian indicator) among the 50 major FX pairs we track....

European Recovery: Periphery Loan-growth Needed

One of the aims of loose monetary policy is to boost lending.  The theory is lower rates and greater availability of liquidity will encourage lending and borrowing, which in turn will boost economic activity.  Unfortunately, an increased supply of loans does not...

A Primer on the Euro Breakup

At the start of 2012, Variant Perception’s research team wrote a paper on the best way to break up the euro. A lot has happened since this paper was written. However, it still provides a clear, solid analysis of the problems leading up to the current situation....
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