US dollar index the "most important macro factor" in European market returns - UBS

Investing.com -- The US Dollar Index is the "most important macro factor" underlying market returns in Europe, according to analysts at UBS.

In a note to clients on Monday, the analysts said the dollar index, which measures the greenback against a basket of its currency pairs, "marginally" increased "its importance from the previous month" in August.

They added that spreads between the benchmark US 10-year Treasury yields and their more interest rate-sensitive 2-year counterparts were also "key drivers" in European markets.

Month-on-month, the UBS analysts said that European valutions were "relatively unchanged" in August compared to July.

"The aggregate forecast PEs suggest that the European market is in line with its historical median," they wrote, adding that, by style, "Quality and Fundamental Growth are still looking expensive compared to their history, whilst the Value styles and Low Risk continue to be on the cheap side."

Source: Investing.com