"Markets are navigating through conflicting European headlines today. Early on, a press story suggested that the ECB officials are discussing setting limits on Eurozone sovereign bond yields – a report that the ECB subsequently said was misleading", they explain. "At the same time, Germany's Bundesbank expressed further reservations on government bond purchases, comments that sent the euro lower against the greenback".
"The week ahead is relatively light for economic data, but the European official calendar is starting to regain pace after a summer lull, and meetings between the German, French and Greek leaders are taking place this week", they say. "We maintain a neutral bias in the short-term in the absence of major European announcements, but our three-month bias remains for a weaker US dollar and stronger foreign currencies".