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3 Apr 2013
Forex Flash: European focus falls on ECB - BTMU
FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that in addition to the BoJ meeting, eyes will be focused on the upcoming ECB meeting too.
He writes, “We do not expect any change in monetary stance and also expect President Draghi to state clearly the ECB view that Cyprus was very unique and that type of banking sector bailout deal would not be repeated elsewhere in the euro-zone. He feels that risks to economic growth will no doubt remain to the downside and while Draghi will state that inflation risks are broadly balanced, he believes that assessment is stretching credibility now.
He maintains that an ECB rate cut will come over the summer months, possibly in June. However, he doesn’t expect any signal of that this week, which should help support the euro. he writes, “Today, the
flash CPI estimate will be released and the consensus is for the annual inflation rate to drop from 1.8% to 1.6% in March, which would be the lowest level since August 2010.”
He writes, “We do not expect any change in monetary stance and also expect President Draghi to state clearly the ECB view that Cyprus was very unique and that type of banking sector bailout deal would not be repeated elsewhere in the euro-zone. He feels that risks to economic growth will no doubt remain to the downside and while Draghi will state that inflation risks are broadly balanced, he believes that assessment is stretching credibility now.
He maintains that an ECB rate cut will come over the summer months, possibly in June. However, he doesn’t expect any signal of that this week, which should help support the euro. he writes, “Today, the
flash CPI estimate will be released and the consensus is for the annual inflation rate to drop from 1.8% to 1.6% in March, which would be the lowest level since August 2010.”