The message that officials of the European Central Bank (ECB) The one suggestion sent from Sintra was one of patience. There is clearly no pressure to make consecutive rate cuts given the slower pace of disinflation, and it appears the preference is also for a wait-and-see approach rather than verbal intervention when it comes to the recent turbulence in the bond market, according to ING FX strategist Francesco Pesole.
EUR/USD moves to 1.0800 and lower this week
“Market expectations for ECB easing (40bp by year-end) received an implicit nod from some speakers who openly discussed the possibilities of further cuts. There is a good chance that those expectations will remain fairly stable through July, meaning that the policy factor should not really be a main driver for EUR/USD.”
“We had argued for a move to 1.0800 on softer US data this week, but concede that the move came ahead of our expectations given the surprisingly low ISM services. We remain somewhat doubtful that markets will be comfortable with EUR/USD trading near 1.09 given lingering uncertainty over French politics and the rising risk of a Trump re-election.”
“In France, there has been a noticeable narrowing in the 10-year OAT-Bund spread, which closed yesterday at 66bp from a late-June peak of 82. The main trigger was the news that numerous centre-left candidates have withdrawn from three-way run-offs to curb the rise of Marine Le Pen’s right-wing National Rally party. This increases the chances of a hung parliament.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
