Back
2 Oct 2013
Flash: EUR upside potential limited on ECB day - RBS
FXstreet.com (Barcelona) - Later today, we should expect the ECB to again say, “It expects the key ECB interest rates to remain at present or lower levels for an extended period of time” notes Greg Gibbs, FX Trading Strategist at RBS.
Key Quotes
"On inflation the ECB will oddly probably continue with their assessment that “The risks to the outlook for price developments are expected to be still broadly balanced over the medium term.”
"There may be some discussion in the ECB statement and press conference about new measures to ensure excess liquidity over the medium term, however, the urgency for policy shift at this time appears low."
"The ECB will take comfort from the ongoing narrowing in periphery spreads and evidence that the economy is at least moving in a positive direction, albeit too slowly."
"Looking through the ECB meeting, the economic risks suggest that the EUR upside potential remains limited and the strength in its periphery bond markets may eventually run out of steam."
Overnight there was a strong gain in Spanish bonds (10 year yields fell 13b), breaking well below Italian yields (-1.5bp), and continued strong performances in Greek and Portuguese bonds
Key Quotes
"On inflation the ECB will oddly probably continue with their assessment that “The risks to the outlook for price developments are expected to be still broadly balanced over the medium term.”
"There may be some discussion in the ECB statement and press conference about new measures to ensure excess liquidity over the medium term, however, the urgency for policy shift at this time appears low."
"The ECB will take comfort from the ongoing narrowing in periphery spreads and evidence that the economy is at least moving in a positive direction, albeit too slowly."
"Looking through the ECB meeting, the economic risks suggest that the EUR upside potential remains limited and the strength in its periphery bond markets may eventually run out of steam."
Overnight there was a strong gain in Spanish bonds (10 year yields fell 13b), breaking well below Italian yields (-1.5bp), and continued strong performances in Greek and Portuguese bonds