EUR: Sentiment and positioning risk - Westpac
|The lack of key hard data will highlight sentiment and positioning risk for EUR, suggests Tim Riddell, Research Analyst at Westpac.
Key Quotes
“IMM net leveraged contracts pushed above zero for the first time since 2011 but Interest rate spreads, Westpac’s data pulse and surprise indices have paused in June and so suggest some EUR corrections.”
“Political positives are also fully priced. France’s REM/MoDem alliance won a historic Assembly majority, but seats gained were at the low end of projections with record low voter turnout. This week saw MoDem leader Bayrou’s and other key members’ forced resignations which leave Macron’s REM forming a less impressive (308) majority and takes the shine off their victory. It also highlights the potential difficulty REM may face enacting their reforms.”
“The faltering of EUR/USD at 1.13 now leaves it range bound and at risk of retracing back to the 1.08-1.10 area.”
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