We had ended 2011 in rather gloomy terms, with the euro-area debt crisis overshadowing virtually all global market action and trends and with slim indications of a lasting, “final solution”.
While the European woes continue to very much direct and influence the day-to-day global risk sentiment, the latest liquidity measures by the ECB, as well as well as decent economic readings from the US and China, have collectively allowed for a cautiously optimistic and positive start to 2012.
The relief rally experienced in the euro this week has clearly had a positive spill over to the CEE region, where the Hungarian forint has also seen some of the late-2011 losses being pared as PM Orban’s administration has come under increasing international pressure to reverse a number of key interventionist political decisions. While we welcome these developments in CEE, we remain cautious in our risk outlook and expect the road to remain bumpy in the near term, not least in Hungary.
Outside of the European developments, elevated oil and higher metals prices look so far to be supportive of such commodity rich currencies as the Brazilian real and Mexican peso and South African rand and Russian ruble, though a good degree of caution is called for in this respect, as high oil prices currently seem to reflect more geopolitical concerns rather than a strong demand outlook.
While the European woes continue to very much direct and influence the day-to-day global risk sentiment, the latest liquidity measures by the ECB, as well as well as decent economic readings from the US and China, have collectively allowed for a cautiously optimistic and positive start to 2012.
The relief rally experienced in the euro this week has clearly had a positive spill over to the CEE region, where the Hungarian forint has also seen some of the late-2011 losses being pared as PM Orban’s administration has come under increasing international pressure to reverse a number of key interventionist political decisions. While we welcome these developments in CEE, we remain cautious in our risk outlook and expect the road to remain bumpy in the near term, not least in Hungary.
Outside of the European developments, elevated oil and higher metals prices look so far to be supportive of such commodity rich currencies as the Brazilian real and Mexican peso and South African rand and Russian ruble, though a good degree of caution is called for in this respect, as high oil prices currently seem to reflect more geopolitical concerns rather than a strong demand outlook.
