26 Nov 2013
Flash: ECB Hansson delivers dovish remarks - Investec
FXstreet.com (London) - Strategists at Investec Bank noted that it was a quiet start to the week but there was still time for some central bank comment.
Key Quotes:
“…this time from Europe with the ECB’s Hansson saying they are ready to cut rates further and are technically ready for a negative deposit rate”.
“There appears to be a growing group at the ECB singing from the same hymn sheet with Germany and ECB head Draghi remaining a little more hawkish”.
“Despite the dovish comments from Hansson the euro continues to operate on a firm footing and is now at higher levels against the US dollar than it was pre the rate cut a few week backs”.
“It’s interesting to note that our trading desk highlighted this morning that now that the contagion risk has abated in Europe, with all sovereign 10y bond yields outside of Greece now below 6%, investors could continue to turn to higher yielding Spanish and Italian bonds in search of yield when many other asset classes are offering low returns and US Fed tapering of Teasury bond purchases is on the horizon. Comments yesterday regarding the importance of the euro as a reserve currency from the Chinese Governor didn’t do the single currency any harm either. “GBPEUR grinded lower throughout the day as there was some widespread profit taking in the pound, also notable in GBPUSD which gave up approximately 1 cent throughout the day”.
“Despite the small pull back in GBPUSD we’re not getting too excited about too much movement either way, with a short term range of 1.6120 and 1.6260 still in place”.
Key Quotes:
“…this time from Europe with the ECB’s Hansson saying they are ready to cut rates further and are technically ready for a negative deposit rate”.
“There appears to be a growing group at the ECB singing from the same hymn sheet with Germany and ECB head Draghi remaining a little more hawkish”.
“Despite the dovish comments from Hansson the euro continues to operate on a firm footing and is now at higher levels against the US dollar than it was pre the rate cut a few week backs”.
“It’s interesting to note that our trading desk highlighted this morning that now that the contagion risk has abated in Europe, with all sovereign 10y bond yields outside of Greece now below 6%, investors could continue to turn to higher yielding Spanish and Italian bonds in search of yield when many other asset classes are offering low returns and US Fed tapering of Teasury bond purchases is on the horizon. Comments yesterday regarding the importance of the euro as a reserve currency from the Chinese Governor didn’t do the single currency any harm either. “GBPEUR grinded lower throughout the day as there was some widespread profit taking in the pound, also notable in GBPUSD which gave up approximately 1 cent throughout the day”.
“Despite the small pull back in GBPUSD we’re not getting too excited about too much movement either way, with a short term range of 1.6120 and 1.6260 still in place”.