20 Jan 2015
Survey: Around 70% expect ECB sovereign QE in January- SocGen
FXStreet (Bali) - Societe Generale's Sebastien Galy has conducted a survey with a sample of 176 over the past few days, finding that almost 70% of investors/clients expect ECB Sovereign QE in January.
Key Quotes
"This survey with a sample of 176 was conducted over the past few days with a fairly even composition of clients."
"Our survey found that almost 70% of investors expect ECB Sovereign QE in January. A smaller group expects it later or additional waves of Sovereign QE. Only a small minority does not believe in Sovereign QE. The bulk of the market expects a program of 500bn but the distribution is quite right skewed with another peak at 1000bn. A significant minority expects the ECB to cut its main refinancing rate in January or in the following months."
"The market believes that peripheral bonds and EUR/USD underprices the odds of easing at the next ECB meeting. Over 60% are sellers of EUR/USD on rallies with only a tiny minority is doing the reverse. On the whole investors target 1.10 as the peak target and expect the ECB is doing the same, another substantial group bets on parity and believes the ECB is doing the same."
"Greece is the only country expected to leave the Eurozone by a significant minority. Around 20% expect Greece to leave in the next two years. The probability of it leaving within one year is 23.4%. Interestingly, roughly as many would be willing to bet for and against their belief of a country leaving the Eurozone."
"Germany is first amongst equal when impacting investment decisions. The ECB board rather than members (ex Germany) is the overwhelming driver of investment decisions."
"For EUR/CHF. the market targets a wide band around parity and a very large proportion refuses to reveal their trading strategy."
Key Quotes
"This survey with a sample of 176 was conducted over the past few days with a fairly even composition of clients."
"Our survey found that almost 70% of investors expect ECB Sovereign QE in January. A smaller group expects it later or additional waves of Sovereign QE. Only a small minority does not believe in Sovereign QE. The bulk of the market expects a program of 500bn but the distribution is quite right skewed with another peak at 1000bn. A significant minority expects the ECB to cut its main refinancing rate in January or in the following months."
"The market believes that peripheral bonds and EUR/USD underprices the odds of easing at the next ECB meeting. Over 60% are sellers of EUR/USD on rallies with only a tiny minority is doing the reverse. On the whole investors target 1.10 as the peak target and expect the ECB is doing the same, another substantial group bets on parity and believes the ECB is doing the same."
"Greece is the only country expected to leave the Eurozone by a significant minority. Around 20% expect Greece to leave in the next two years. The probability of it leaving within one year is 23.4%. Interestingly, roughly as many would be willing to bet for and against their belief of a country leaving the Eurozone."
"Germany is first amongst equal when impacting investment decisions. The ECB board rather than members (ex Germany) is the overwhelming driver of investment decisions."
"For EUR/CHF. the market targets a wide band around parity and a very large proportion refuses to reveal their trading strategy."