March 29, 2010
The stronger Euro is helping to boost demand for higher risk assets, underpinning global equity markets overnight. U.S. equity indices finished last week higher, but the markets
looked tired as the week ended. The stronger Euro is encouraging investors to ignore last week’s action and instead turn their focus on the better returns being offered by equity markets.
Volume continued to look anemic last week but prices rose anyway, making investors a little suspect as to whether this rally has enough legs to continue at its current pace. Optimism
because of the approval of the EU/IMF financial aid package is renewing interest in holding higher yielding assets.
At times last week’s rally looked labored despite a weaker Dollar and signs that tensions regarding the fiscal concerns in the Euro Region may be abating. This attitude appears to be
shifting this morning. Last week traders seemed a little hesitant to use the Greek news as a catalyst to drive the markets higher, indicating that most are still reluctant to buy strength while
remaining in the “buy the dip” mode. Risk sentiment …
