EUR: Enjoy the silence – ING
|The Euro (EUR) is enjoying some “silence” on French politics, which is making investors comfortable so far with EUR/USD drifting slightly higher from the 1.0800-1.0830 anchor, ING’s FX strategist Francesco Pesole notes.
EUR/USD eyes 1.0900 in the short run
“If you read French news, you would get anything but a sense of silence, but global markets inherently filter out noise to prioritise major developments, and so far there have been none on coalition talks. President Emmanuel Macron joined the NATO meeting leaving French parties from the left working on a strategy to secure key government seats.”
“Interestingly, the option of a deal between Macron’s party and the moderate right-wing Republicans is gaining some momentum. Former prime minister Edouard Philippe (who is part of Macron’s alliance) is attempting to broker the deal. This would, however, only guarantee a relative majority.”
“The OAT-Bund 10-year spread has been stabilising around 65bp, and while we continue to see a risk of rewidening as markets may grow impatient with the political gridlock, the rest of this week should see a shift of focus towards US macro developments. As discussed above, the US Dollar may soften today and EUR/USD could eye 1.0900. The eurozone calendar is empty.”
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