ECB’s tapering debate expected to pick up pace – Danske Bank

Senior Analyst at Danske Bank Jens Pedersen believes rumours on potential ECB tapering could be an important driver for the pair’s price action in the next months.

Key Quotes

“Last week added to the speculation on global monetary tightening on the back of the comments from the ECB’s Mario Draghi”.

“Furthermore, the comments from the Bank of England’s (BoE’s) Carney confirmed the hawkish stance of the BoE. We did see some backtracking from the ECB, but not enough to send bond yields back down as core inflation in the euro area ticked upwards”.

“Hence, market sentiment is dominated by the focus on monetary tightening and with a string of economic data releases during the week as well as FOMC minutes and ECB ‘minutes’, the focus will remain on both the ECB tapering discussion as well as the hawkish stance of the Federal Reserve”.