A look at the week ahead: EUR/USD to remain range bound? - Socgen

Kit Juckes, economist at Societe Generale offered his view points on the week ahead.

Key Quotes:

"US - nothing to see here...:

The US sees minor data this week (housing starts, Philly Fed, existing home sales) and that won't be a driver of markets. But US markets will be a driver, as equities remain well supported and bond yields are adjusting to equities. The dollar needs more real yield support (and needs the nominal rates market to get ahead of real rates/yields.

Words, words, words - I'm so sick of words:

The ECB is going to be long on words, short on action. A quiet US calendar, a lack of ECB action, and range-bound EUR/USD. My guess - we don't go very far, with the focus on the UK, Turkey, the reaction to the events in Nice, and concerns about what's going on in the South China Sea.

The bigger question (and the yen):

Can the certainty of easy Fed policy, the warm, cuddly and meaningless words of the ECB and the likelihood that fiscal and monetary policy can now work together in Japan, trump the multiple surprises (mostly bad) which are coming from every conceivable angle? My bet, slightly controversially, is that for now, it can. Staying short of the yen......."