The March Market Voice focused on three factors which explained the seemingly perverse EUR strength in the face of an increasing USD interest rate advantage: The EUR was historically cheap in real terms when it bottomed. Central bank – especially China – diversification away from the dollar may have been a source of strength. The relative value of equity markets may have been compelling enough to overwhelm the negative rate picture. We felt these three factors were generating substantial enough flows into EUR that defeated the negative interest rate environment. But in March when the article was published, it appeared

After all the political surprises and worries about the rise of populism over the past year or so, the upcoming German election slated for September 24, should provide welcome relief. The opinion polls all point to a clear victory by Merkel’s CDU/CSU, with the opposition SPD trailing by some 15 percentage points. We say should, of course, because as we saw with last year’s Brexit and Trump victories, and the UK general election result earlier this year, the polls do not always get it right. However, strengthening our conviction in a surprise-free result is the fact that when we look