sentix ASR Essentials 48-2015
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29 November 2015
Posted in
sentix Weekly
Stretched sentiment on FX and Equities as CB meetings loom large
The latest sentix survey provides a timely insight into investors’ thinking heading into a key period for markets, with December’s ECB and Fed meetings having cast an increasingly long shadow across markets in recent weeks. The survey highlights several areas in which sentiment has become notably stretched. In FX, investors remain extremely pessimistic on the near-term outlook for the Euro versus the US dollar. This is in marked contrast to the high optimism that is evident on equity indices such as the EuroSTOXX. Such stretched sentiment suggests a lot of central bank (CB) news is already built into FX and equity markets, which may leave them vulnerable to any disappointment. In the case of equities, the survey also suggests investors have become highly uncertain about the medium-term strategic outlook (Charts 2-4, P2). It could make for a volatile ride for markets in the coming weeks.
