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22 Oct 2015
Draghi’s bluff: Dovish tone but no action – TDS
FXStreet (Delhi) – Research Team at TDS, suggest that the FX market has not yet called Draghi’s bluff, but we think such a challenge could come soon if dovish talk does not become action.
Key Quotes
“The EUR is trading no a softer footing ahead of today’s ECB meeting, which represents the key focus for investors. EURUSD has found some support just above the 1.13 mark, but we note that the market’s mood toward the common currency appears to have soured over the last several days.”
“As shorter-dated interest rates continue to bleed lower, we note that while we see December as a better candidate for additional easing from the Governing Council, it remains a fairly close call and today is clearly in play. This leaves the EUR very much subject to enhanced two-way risks today.”
“We could see QE and/or rate cuts now, which would be unambiguously bearish for the EUR. But as the market has come to price and expect some of this in the coming months, this puts a burden on Draghi’s language to deliver.”
Key Quotes
“The EUR is trading no a softer footing ahead of today’s ECB meeting, which represents the key focus for investors. EURUSD has found some support just above the 1.13 mark, but we note that the market’s mood toward the common currency appears to have soured over the last several days.”
“As shorter-dated interest rates continue to bleed lower, we note that while we see December as a better candidate for additional easing from the Governing Council, it remains a fairly close call and today is clearly in play. This leaves the EUR very much subject to enhanced two-way risks today.”
“We could see QE and/or rate cuts now, which would be unambiguously bearish for the EUR. But as the market has come to price and expect some of this in the coming months, this puts a burden on Draghi’s language to deliver.”