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Report 7- 2017

The most significant events of the past month  are essentially two:   the FED meeting and the strength of the euro.

Commonly, the two events are associated and the effects on the change are a consequence of FOMC's decisions. This time, in our opinion, other forces might have acted on the euro currency.

 The decision not to increase US rates was largely predictable, macro data not exciting and downward inflation rate. So everything on expectations.

So the strong appreciation of the euro is justified  if the euro economy does not enjoy good health?

Trump's statements against the German surplus,  cause of the weakness of the euro, have reached the goal of strengthening the euro, which partially resizes the German surplus and gives the US economy a leverage advantage not more than 1.07.

The duration of this cycle is not foreseeable even though the first target of the € / $ to 1.20  has been reached. The European economy does not enjoy very good  except Germany.

Even here the inflation targets are far off and we believe than at the distance  the US dollar will return winner.


We attach schedule of the portfolio.

Giorgio Giovannoni

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