#EURUSD @ 1.08821 : Resilient US data next week could prompt a correction – MUFG
…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]
Economists at MUFG Bank analyze the two-year government bond spread between US and EU and discuss its implications for the EUR/USD pair.
“We remain unconvinced that the ECB will have to tighten by a further 50 bps but expectations continue to grind higher with the 2yr government bond spread more indicative of EUR/USD trading up closer to 1.1500. But with the market still priced for about 50 bps of easing from the Fed by year-end, that spread looks set to continuing supporting EUR/USD for now. We remain wary over that spread dynamic remaining so compelling which could prompt a correction in EUR/USD – next week’s US data may be the catalyst for that if the data remains resilient.”
“Month-end (quarter-end and FY-end for Japan) FX flows today could also spark some unpredictable moves that could alter the complexion of the market ahead of the key data from the US next week.”
[/s2If]
Join Our Telegram Group
