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26 Jan 2015
Post-ECB fallout and positioning – TDS
FXStreet (Barcelona) - Analysts at TD Securities comment on the post-ECB effect in EGBs and EUR/USD, adding that the pair might move below parity by year-end.
Key Quotes
“By finally diving headfirst into QE, the ECB has reinforced a dynamic where the market can take yields and the currency to an equilibrium that returns inflation back to target and supports growth. This means a lower level of Eurozone and global rates for even longer, with negative net supply in EGBs meaning significant outperformance of long bonds, and FX depreciation which we think will take EURUSD to 0.96 by year-end.”
Key Quotes
“By finally diving headfirst into QE, the ECB has reinforced a dynamic where the market can take yields and the currency to an equilibrium that returns inflation back to target and supports growth. This means a lower level of Eurozone and global rates for even longer, with negative net supply in EGBs meaning significant outperformance of long bonds, and FX depreciation which we think will take EURUSD to 0.96 by year-end.”