4 Apr 2014
Draghi has a talent for talking the market - Danske Bank
FXStreet (Barcelona) - Kasper Kirkegaard, Chief Analyst at Danske Bank feels that if there is one thing ECB President Mario Draghi has been successful with during his tenure, it is moving market prices by merely hinting at policy action, while not actually implementing new measures.
Key Quotes
“This was also largely the case yesterday, as President Draghi managed to talk equity markets higher by stating that unconventional measures including quantitative easing are a possibility if inflation does not pick up as expected – and that the Governing Council was ‘unanimous’ in its commitment. The EuroStoxx 50 future closed 0.5% higher and European sovereign spreads tightened.
“We expect euro rates to remain stuck in recent ranges, see potential for further peripheral spread tightening, and see an increasing probability that the peak in EUR/USD is now over. Following yesterday’s move lower, EUR/USD has been trading stable just above 1.37 overnight.”
Key Quotes
“This was also largely the case yesterday, as President Draghi managed to talk equity markets higher by stating that unconventional measures including quantitative easing are a possibility if inflation does not pick up as expected – and that the Governing Council was ‘unanimous’ in its commitment. The EuroStoxx 50 future closed 0.5% higher and European sovereign spreads tightened.
“We expect euro rates to remain stuck in recent ranges, see potential for further peripheral spread tightening, and see an increasing probability that the peak in EUR/USD is now over. Following yesterday’s move lower, EUR/USD has been trading stable just above 1.37 overnight.”