Shares are set to surge, with appetite for risk assets seen rising after European leaders agreed on a supervisory body for euro zone banks and to allow them to be recapitalized directly by the rescue fund without adding to government debt.
But I'm a bit still cautious as we have seen the cases where different leaders later say different things and we find out that there remain disagreements. As a result, the greenback (Dollar) is expected to slip against the Yen, Euro and Indian Rupee.
High-beta currencies like the Australian dollar, which shall enjoy a surprise short-covering rally. These gains on the euro zone news.
European leaders agreed on Friday to create a single supervisory body for euro zone banks and allow them to be recapitalized directly by the currency area's rescue fund without adding to government debt.
Still, there was a degree of skepticism with me waiting for more clarity about the measures agreed. I want to point to considerable execution risks in the move to empower the ECB with a supervisory role that could prove to be contentious. Besides, the market would soon start to question whether the euro zone's rescue fund has enough resources to recapitalize banks and buy peripheral bonds given the huge debt liabilities of both
Italy and . Spain
Sr Vice President
wiTdom investment advisory