17 Feb 2014
Flash: PMI’s for Euroland to rock ECB? - BBH
FXStreet (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman noted improvements in the Euroland that may disappoint those expecting action from the ECB.
Key Quotes:
"At the same moment that the legal basis of OMT has been questioned by the German Constitutional Court, the economic and financial condition of the euro area has improved. Growth in Q4 was a stronger than expected."
"Interest rates in the periphery have continued to trend lower. Portugal sold 10-year bonds last week and non-domestic investors took down the overwhelming majority."
"EONIA has stabilized. It appears that excess liquidity has as well."
"The risk is that market sentiment, which is inclined to see further ECB action (small repo rate cut), is again disappointed. The economic highlight of the week is the flash PMI on Thursday."
"While both French readings may remain below the 50 boom/bust level, economists are expected small improvement. France also report January inflation figures. A fall in energy prices will pressure the headline number, but the year-over-year rate is likely may tick up due to base effects."
Key Quotes:
"At the same moment that the legal basis of OMT has been questioned by the German Constitutional Court, the economic and financial condition of the euro area has improved. Growth in Q4 was a stronger than expected."
"Interest rates in the periphery have continued to trend lower. Portugal sold 10-year bonds last week and non-domestic investors took down the overwhelming majority."
"EONIA has stabilized. It appears that excess liquidity has as well."
"The risk is that market sentiment, which is inclined to see further ECB action (small repo rate cut), is again disappointed. The economic highlight of the week is the flash PMI on Thursday."
"While both French readings may remain below the 50 boom/bust level, economists are expected small improvement. France also report January inflation figures. A fall in energy prices will pressure the headline number, but the year-over-year rate is likely may tick up due to base effects."