Back
22 Jan 2015
ECB: Market reaction to the fact - Investec
FXStreet (Guatemala) - Investec Bank dealing desk explained the markets reaction to the ECB meeting today and likely scenarios for the medium term for the Euro.
Key Quotes:
"Amidst the sell-off in the Euro, we did see two sizeable squeezes higher as we note that a large proportion of this QE program was priced in by the market, after details just shy of this announcement were released by ECB sources yesterday afternoon."
"The Euro struggled initially to fall materially and could not make a new yearly low - despite the QE package being at the top end of expectations. In the short term we risk a squeeze higher in the Euro now all policy is announced as there is no additional stimulus for the market to price in or pre-empty, something us traders call ‘buy the rumour, sell the fact’."
"Certainly though, once the dust has settled, I would expect a move lower from here in the Euro in the medium term as the continued effect of negative deposit rates combined with flooding of over Euro 1 trillion extra into the market over the next year and a half should continue to weaken the single currency."
Key Quotes:
"Amidst the sell-off in the Euro, we did see two sizeable squeezes higher as we note that a large proportion of this QE program was priced in by the market, after details just shy of this announcement were released by ECB sources yesterday afternoon."
"The Euro struggled initially to fall materially and could not make a new yearly low - despite the QE package being at the top end of expectations. In the short term we risk a squeeze higher in the Euro now all policy is announced as there is no additional stimulus for the market to price in or pre-empty, something us traders call ‘buy the rumour, sell the fact’."
"Certainly though, once the dust has settled, I would expect a move lower from here in the Euro in the medium term as the continued effect of negative deposit rates combined with flooding of over Euro 1 trillion extra into the market over the next year and a half should continue to weaken the single currency."