Unsurprisingly, the European Central Bank (ECB) kept monetary policy unchanged Thursday after the Governing Council meeting. Analysts Danish bank they consider that the meeting will not have any impact on EUR / USD expectations. See the pair making range moves around 1.22.
“The ECB meeting that ended today passed without incident, without new signs. The market interpreted the inclusion of explicit reference to financing conditions in the 13:45 CET decision as a small aggressive twist, sending prices higher and strengthening the EURUSD. Both metrics regressed during the subsequent press conference. However, the reference was also in the introductory statement in December and refers to general financing conditions, that is, multiple rates, and not to a specific curve or point on the curve. “
“EUR / USD was practically unchanged during the ECB meeting, with a small increase at the beginning. Lagarde’s language seems quite in line with investors’ expectations (and ours) of the European macroeconomy and the ECB. In turn, we saw little to move the ship. We forecast that the pair will trade at 1.22 in 1-3 months, expecting largely in-range moves in the 1.20-1.24 “area.
Bond yields fell after the initial surprise. However, today’s meeting was uneventful and we are still comfortable with the -60 bp to -40 bp range on German bonds. We also expect risk appetite and the pursuit of duration / performance to prevail. “
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