25 Sep 2013
Flash: German coalition progress sees modest EUR/USD scope - BTMU
FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets research at the Bank of Tokyo Mitsubishi UFJ notes that the euro remains very stable while the markets await the start of negotiations on a grand coalition in Germany.
Key Quotes
“We will no doubt go through phases in which the markets become concerned over how these negotiations are proceeding and the news so far suggests that concerns could be triggered quite quickly.”
“Some SPD members are calling for an inner-party referendum while others are calling for a wider party-member referendum which would probably mean the SPD rejecting a deal.”
“No doubt we may now see the CDU indicate a willingness to work with the Greens but the Greens leadership is in flux and is probably not yet in a position to negotiate. As this drags on we may start to see greater investor concern over the fact that policy developments across the euro-zone will be on hold possibly for some considerable time.”
“The 2014 France budget will be unveiled today with EUR 15bn of spending cuts expected. We still see only modest scope to the upside in EUR/USD, which relates more to the US than Europe.”
Key Quotes
“We will no doubt go through phases in which the markets become concerned over how these negotiations are proceeding and the news so far suggests that concerns could be triggered quite quickly.”
“Some SPD members are calling for an inner-party referendum while others are calling for a wider party-member referendum which would probably mean the SPD rejecting a deal.”
“No doubt we may now see the CDU indicate a willingness to work with the Greens but the Greens leadership is in flux and is probably not yet in a position to negotiate. As this drags on we may start to see greater investor concern over the fact that policy developments across the euro-zone will be on hold possibly for some considerable time.”
“The 2014 France budget will be unveiled today with EUR 15bn of spending cuts expected. We still see only modest scope to the upside in EUR/USD, which relates more to the US than Europe.”