The EUR has been appreciating against the USD of late. The single currency received support from a slightly more upbeat ECB press conference on Thursday. Rates and hence the EUR have in particular been benefitting from ECB President Draghi’s relaxed stance regarding tighter liquidity conditions. However, the same has been weighing on risk sentiment as suggested by European stock markets. In our view this provides a big warning signal. Should EUR-denominated risk assets fall back into a trend of sustainable underperformance against their US peers this may act as an indication for a deteriorating capital flow ... (full story)