A faily uneventful ECB meeting, EUR/USD to remain range-bound – Danske Bank
|As expected, the European Central Bank (ECB) kept monetary policy unchanged on Thursday after the Governing Council meeting. Analysts from Danske Bank consider the meeting have no impact on EUR/USD expectations. They see the pair making larte rage-bound moves around 1.22.
Key Quotes:
“The ECB meeting concluded today was fairly uneventful, with no new signals. The market interpreted the inclusion of the explicit reference to financing conditions in the 13:45 decision as a small hawkish twist, sending rates higher and the EURUSD stronger. Both metrics fell back during the press conference. However, the reference was also in the introductory statement in December and refers to general financing conditions, i.e. multiple rates, and not a specific curve or point on the curve.”
“EUR/USD was broadly unchanged over the ECB meeting, with a small surge at the beginning. The language from Lagarde appears quite well in line with investor expectations (and ours) of European macro and the ECB. In turn, we saw little to rock the boat. We forecast 1.22 in 1-3M time, expecting largely range-bound moves in the 1.20-1.24 area.”
“Bund yields fell back after the initial surprise. However, today’s meeting was fairly uneventful and we are still comfortable with the -60bp to -40bp range on the Bunds. We also expect continued risk appetite and the hunt for duration/yield to prevail.”
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