The Euro is running uphill into a headwind, Kit Juckes, Chief Global FX Strategist at Société Générale, reports.

The wind is in the Euro’s face

“The equity market’s calling the bond market disparaging names, accusing the yield curve of sending false recession signals because of QE distortions. Against this backdrop, the Euro is running up a steep hill into a strong wind.” 

“Market pricing looks for the ECB to continue raising rates in the second half of the year, and for the Fed to cut rates, resulting in the policy rate gap narrowing to under 1% by year-end from 2% now. Given the contrast between Friday’s payrolls and yesterday’s weak German industrial production data has been hard to narrow the gap further.”