Credit Agricole CIB FX Strategy Research expects the political jitters in the wake of the Catalan independence referendum to start abating in the coming days.
"In particular we think that the Catalan leaders will not proclaim official independence on the basis of the referendum result alone and, instead, call snap elections for early 2018. This much could allow investors to shift their focus to the improving Eurozone fundamentals and the upcoming October ECB meeting.
We expect that the announcement of the details of the ECB’s QE taper will have a positive impact on both EGB yields and EUR from here," CACIB argues.
In terms of the data calendar next week, CACIB notes that it is relatively light with only the German ZEW and the final HICP data out of the Eurozone due.
In line with this view, CACIB maintains a long EUR/USD position from 1.1770 with a taget at 1.2200, and a stop at 1.1520.
Source: Credit Agricole CIB ResearchOriginal Article
