FXStreet (Delhi) – Thomas Harr, Global Head of FICC Research, notes that the global industrial production (IP) cycle is bottoming out and we are now seeing further signs of that. Key Quotes “The global signal strength has turned positive for the first time since April. Second, synchronicity has improved significantly as more models across regions have turned positive. Finally, the medium-term models, which provide the best signal for the change in growth momentum on a three-four month horizon have turned positive in the US, Europe and Japan.” “The clearest signal is in Europe, where the latest data has shifted the medium-term model to a clear picture of positive momentum after sending somewhat mixed signals over the past two months.” “Based on historical performance, this is supportive for risk assets, particularly equities and especially in Europe where the signal is most clear. In our view, this will be further supported by a very aggressive ECB on 3 December.” “Yes, market expectations are running high that the ECB will deliver but ECB board members this week have done nothing to dampen expectations of aggressive easing, which is exactly the reason to believe that they will be very aggressive.” “For euro yields, we see the current environment as broadly neutral with ECB easing being counterweighed by higher US yields and a turn higher in the global IP cycle.” For more information, read our latest forex news.