Recent economic data are fitting into either the good or
great category, says Societe Generale’s Patrick Bennett; “there are no bad
numbers. Risk appetite is once again in the ascendant as investors are cheered by data and the translation to equity market gains – anyone for a bubble?” Are a number of key data prints to come this week, including U.S. payrolls Friday; USD remains under broad pressure and JPY is underperforming, while AUD has been top G10 performer in last 24 hours, putting on some more ground following solid 1Q GDP. “A fair question to ask might be what were the RBA thinking yesterday?
There have been some suggestions that the recent strength in the Australian
dollar may have played a role in their cautionary tone – if so they must be
none too pleased today.” USD/Asians finding some support though on intervention by central banks in region to provide local currency liquidity.

Debt from companies with some of the lowest credit ratings had its best month ever last month, in yet another sign that sentiment is continuing to improve, even on some of the most stressed assets.

The leveraged loan market has staged a strong rally as consensus that a recovery is just around the corner becomes more entrenched, prompting investors to look further and further down the ratings spectrum in a bid to boost returns.

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