Top of the Morning: CEO Macro Briefing Book - Insights for Dealmakers
At a Glance
The desk believes ongoing deal-making momentum, supported by recent macro insights from UBS, will positively influence market sentiments in the foreign exchange rate space. Per the full note , a resurgence in M&A activity, spurred by lower rates and technological advancements, suggests a robust outlook for select currencies, particularly aligned with economic growth. UBS forecasts a stabilized M&A landscape moving forward, positively impacting risk sentiment and consequently currency valuations. With no high-impact events scheduled in the next month, traders should focus on macroeconomic data and M&A announcements for market direction.
Key Takeaways
- 01Ongoing momentum in deal-making may positively influence currency valuations.
- 02M&A activity rebounded after a downturn following pandemic-related economic shocks.
- 03No major economic events are scheduled that could disrupt the current forex landscape.
Full Analysis
What the desk is arguing
The desk posits that the current momentum in deal-making could act as a catalyst for appreciation in selected currencies, reflecting broader economic recovery. Per the full note , the resurgence of M&A activity, especially post-pandemic and against a backdrop of lowered interest rates, underscores a potentially fertile ground for exciting currency movements.
Recent trends show that M&A activity is rebounding, as it approached nearly $3 trillion globally in 2021 before declining following the rate hikes in 2022. Now, momentum in this area appears to be picking up again, potentially influencing related currencies positively.
Where it sits in our coverage
Our consensus target for USD/EUR remains at 1.075, with a range set between 1.04 and 1.12. Key firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk's call for continued positive momentum aligns with jpmorgan, which forecasts a stronger dollar throughout its anticipated timeframe. However, this position sits on the upper end of the current spread, indicating varying convictions amongst firms on future pricing.
How other firms see it
Generally, firms like jpmorgan are aligned with this optimistic outlook regarding a rebound in M&A activity, which could spur currency movements. Conversely, firms like bofa maintain a more cautious stance, reflecting skepticism about sustained currency valuations amidst broader economic uncertainties.
This discussion intersects notably with the EUR/USD trajectory and ongoing monetary policy considerations from central banks, illuminating the delicate balance of risk and opportunity in current forex landscapes.
Market Implications
Traders should monitor any announcements around M&A activity or technological advances that could sway market sentiment. Key levels to watch are the upper boundary at 1.075, along with references from firms' insights that could signify movements in USD and EUR trades.
From the original
Paul drops by to update on dealmaking trends and momentum in 2026, along with a look at the impact artificial intelligence is having on the dealmaking landscape. Featured is Paul Hsiao, Asset Allocation Strategist Americas, UBS Chief Investment Office. Host: Daniel Cassidy
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4 itemsTop of the Morning: CEO Macro Briefing Book - Insights for Dealmakers
Top of the Morning: CEO Macro Briefing Book - Insights for Dealmakers
The desk believes that 2025 may herald significant opportunities in the M&A landscape, driven by stabilizing valuations and a supportive regulatory environment. Per the full note from UBS's Chief Investment Office, past hindrances in deal activity, primarily due to valuation discrepancies, are beginning to ease. The implication is that higher levels of deal-making could bolster investor sentiment and align with a more stable inflation backdrop. Current market conditions and growth prospects are aiding this sentiment shift, particularly as M&A activity saw a modest increase previously, suggesting a solid foundation for further growth.
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