The better to protect you with, my dear…
Markets are seeing a modest risk-on rally after the US income and spending data pass uneventfully.
Spanish bond yields have fallen as the government unveils its budget for the next fiscal year, which includes 17% spending cuts at the ministerial level.
Selling from central banks was seen on rallies earlier today in this 1.3365/75 window and we’d expect more of the sale as the day wears on. 1.3400 barriers remain in play.
Equity markets in Europe and the US are on the up after the US reversed its losses late in the day Thursday, helping improve risk sentiment. The main headline today is the EUR 700 bln firewall to guard against contagion, in line with market expectations.