NAB FX Strategy Research discusses EUR/USD outlook ahead of the ECB meeting on Thursday.
"We’re pretty much in with the crowd in expecting the current EUR60bn per month APP being cut to EUR30bn, which we think the ECB will want to ‘run until the end of September 2018, or beyond’. We’ve had the September timeframe for around a year now," NAB projects.
If the ECB is to surprise, where would such a surprise come from?
"1- A Statement line and/or Draghi press conference comments that presses the point the ECB really might carry on buying assets into 2018 (e) would be seen as more dovish than expected.
2- Equally a hard ending of QE buying in June 2018 would be hawkish.
3- Anything that suggest the negative Deposit Rate could be tinkered with during 2018, will equally be seen as hawkish in a way that could have more of a market reaction," NAB argues.
On EUR/USD, NAB expects the pair to hold a 1.1675-1.1875 range short-term.
Source: NAB ResearchOriginal Article
