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11 Dec 2014
EUR trades flat – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes that EUR is flat to yesterday’s close, having been slightly supported by the announcement of a slightly lower than expected EUR130bn TLTRO allotment and a mixed USD environment.
Key Quotes
“The TLTRO allotment, was well below what was offered, should Friday’s repayment be strong, it would support the case for additional bond buying further. Fundamental data today was generally soft: German inflation was as expected, up 0.6% y/y; while French inflation was softer than expected, up just 0.3%y/y. European yields continue to fall, with the German 10‐ear now trading at fresh record lows of 0.66%.”
“In the ECB Monthly Bulletin they detail the impact of oil prices on inflation, suggesting that 0.6percentage points of the 0.9% drop in HICP inflation ex food and energy is attributed to the fall in oil prices.”
“For EUR, the combination of low growth, falling inflation, the building likelihood of an expanded QE program and negative sentiment should all weigh on EUR into 2015.”
“EURUSD short‐term technicals: mixed—as technical studies conflict, it suggests that there is some confusion; however for near‐term traders the pattern has shifted to more favourable. The MACD has shifted into buy territory and spot has broken up above resistance, opening up a near‐term test of the 50‐day MA at 1.2546. Beyond the near‐term; technicals still warn of downside risk into 2015.”
Key Quotes
“The TLTRO allotment, was well below what was offered, should Friday’s repayment be strong, it would support the case for additional bond buying further. Fundamental data today was generally soft: German inflation was as expected, up 0.6% y/y; while French inflation was softer than expected, up just 0.3%y/y. European yields continue to fall, with the German 10‐ear now trading at fresh record lows of 0.66%.”
“In the ECB Monthly Bulletin they detail the impact of oil prices on inflation, suggesting that 0.6percentage points of the 0.9% drop in HICP inflation ex food and energy is attributed to the fall in oil prices.”
“For EUR, the combination of low growth, falling inflation, the building likelihood of an expanded QE program and negative sentiment should all weigh on EUR into 2015.”
“EURUSD short‐term technicals: mixed—as technical studies conflict, it suggests that there is some confusion; however for near‐term traders the pattern has shifted to more favourable. The MACD has shifted into buy territory and spot has broken up above resistance, opening up a near‐term test of the 50‐day MA at 1.2546. Beyond the near‐term; technicals still warn of downside risk into 2015.”