Market Outlook: Euro Risk Premium Narrows Further

Forex - The credit spread or risk premium in euros has further narrowed. UniCredit Research analysts stated, "Both bank and non-financial sector credit spreads continue to narrow, maintaining the positive trend observed since last week." Credit investors are awaiting the U.S. inflation data due at 16:30 GMT, which will provide an indication of whether the Federal Reserve will lower interest rates as the markets expect next week. Additionally, they are anticipating a high probability decision from the European Central Bank regarding a rate cut on Thursday.