Five things that will NOT happen in the next 6 months: Part II - Europe and the Euro

Last week we laid out the first two of our "Anti Forecasts" of events that will NOT happen in the next six months. This week we release the next two, which are focused on Europe. The first call is that "The European Periphery will NOT be tested again in 2015, as measured by Spanish bond spreads". One of the key tests of the Greek crisis would be how did the ECB 'firewalls' that aimed to see contagion risk not blow out to other peripheral bond spreads. This held up remarkably well and we don't think it will be tested again. The second call is "The Australian dollar versus the Euro will NOT finish the half below the current level of 0.67". The path to getting Europe growing again involves a weaker Euro. Slightly better Aussie data and an RBA that doesn't want to cut again should mean the lows around here hold. For a fuller discussion please see our blog (VIEW LINK)