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3 Mar 2014
Flash: ECB still expected to ease near term – Dasnke Bank
FXStreet (Edinburgh) - Analyst Lars Christensen at Danske Bank expects the ECB to eventually incur in more monetary easing against the backdrop of increasing disinflation figures in the euro area.
Key Quotes
“In the short-end EUR rates, the market got caught on the wrong foot on Friday, as the CPI print surprised on the high side. This led to a significant re-pricing of the risk of the ECB easing on Thursday’s meeting”.
“While we do yet not know why inflation surprised, it does not alter the fact that there is still a significant need for easing monetary conditions in Europe”.
“Hence the market will continue to expect further easing in the coming quarters, and the Eonia curve will probably remain inverse for some time”.
Key Quotes
“In the short-end EUR rates, the market got caught on the wrong foot on Friday, as the CPI print surprised on the high side. This led to a significant re-pricing of the risk of the ECB easing on Thursday’s meeting”.
“While we do yet not know why inflation surprised, it does not alter the fact that there is still a significant need for easing monetary conditions in Europe”.
“Hence the market will continue to expect further easing in the coming quarters, and the Eonia curve will probably remain inverse for some time”.