After the major market shakeout through May over European debt fears, we have begun to see a slightly better attitude when it comes to risk. Granted, financial markets have priced in a decent chance of a double-dip recession for advanced economies later this year. The economic data, on the other

The huge rescue package announced on 9 May only gave a brief boost to the euro and EUR/USD fell in the beginning of June for the first time in four years below 1.20. However, we doubt the trouble is over for the euro and now see EUR/USD testing 1.15 in

Our base case scenario again assumes a risk-bearish trajectory for the medium to longer term. The short-term environment this time around has been extremely volatile, as often happens in risk averse markets, so we are least comfortable with the 1-month view, since the market can lurch around widely in a

Financial markets continued to gyrate wildly in the past month. That said, the package of support measures from European governments has helped to calm fears of imminent default in the so-called peripheral countries in the euro zone, like Greece, Ireland, Portugal and Spain. Nevertheless, a brief look at credit spreads,

The recent bout of risk aversion has seen USDCAD challenge the structural resistance around 1.0750-1.08 on a two occasions recently, first as a complacent market was caught way too short when the Flash Crash struck in early May, and then with the follow up bout of risk aversion that took

Our forecast continues to incorporate a significant slowdown during the second half of the year. After likely expanding at a 3.4 percent pace during the current quarter, real GDP is expected to slow to a mere 2 percent pace during the second half of 2010. Conditions over the past month

Last month, our carry trade observations were taking place just as risk was trying to bounce back from what many have now dubbed the “Flash Crash” because the crash in risk leading into and culminating on May 6 was so ephemeral and because the real “crash” part of the decline

The extended homebuyer tax credit fooled the US housing market into another high, pushing a new home sales rally of 42% in 2010, while sales of existing homes have increased 6%. The latter reacted more forcefully to the first homebuyer tax credit than has so far been the case in

The uncertainty created by Europe’s sovereign debt crisis caused ripples in financial markets in the past month but, outside the region, had little effect on the pace of economic growth. Data from Canada and the US confirmed that the recoveries are underway with Canada overshooting expectations while the U.S. economy

Volatility has crept back into financial markets due to concerns that the sovereign debt crisis in the Euro-zone may lead to another recession there. At a minimum, fiscal tightening over the next few years will create powerful headwinds on growth in many individual economies in the Euro-zone. If another downturn