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2 Jun 2015
Euro area ‘reflation’ narrative should fade – RBS
FXStreet (Barcelona) - Brian Daingerfield, FX Trading Strategist at RBS previews the Eurozone composite CPI release and ECB’s rate decision this week, and further remains bearish on the EUR/USD.
Key Quotes
“Preliminary May CPI data in Spain and Germany both revealed modest pickups in headline and core CPI rates, and the Euro-area composite CPI estimate may show a similar result.”
“Even so, we think the ECB is likely to keep its policy rates and key conclusions unchanged at the June policy meeting this week, with a particular emphasis on the importance of completing its QE program as scheduled.”
“We think the Euro-area “reflation” narrative should be faded and prefer EUR/USD downside.”
“Our European rates independent research colleagues feel that European FI can rally as quickly as it sold off, which if materialized would likely weaken the EUR.”
Key Quotes
“Preliminary May CPI data in Spain and Germany both revealed modest pickups in headline and core CPI rates, and the Euro-area composite CPI estimate may show a similar result.”
“Even so, we think the ECB is likely to keep its policy rates and key conclusions unchanged at the June policy meeting this week, with a particular emphasis on the importance of completing its QE program as scheduled.”
“We think the Euro-area “reflation” narrative should be faded and prefer EUR/USD downside.”
“Our European rates independent research colleagues feel that European FI can rally as quickly as it sold off, which if materialized would likely weaken the EUR.”