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7 Mar 2013
Forex: EUR/USD holds above 1.3000 ahead of ECB
The market is soon to know about ECB's decision for March and the EUR/USD keeps steady above 1.3000, currently at 1.3020. Investors were now informed that the BoE kept things unchanged, surprising some more dovish traders.
TD Securities analysts believe the ECB has seen enough to increase its dovishness, “but not enough to cut yet (although we do put odds of a refi rate cut at 30-40%, which is more than is priced into the market)”. “And while we’ve seen disappointing survey data over the last month, that won’t be enough to dissuade the optimists from the story of improvement, and the recent depreciation of EUR will leave the currency as a less pressing concern”, wrote analyst Alvin Pontoh.
German factory orders dropped -1.9% (MoM) in January, instead of rising -0.5% as expected. The annualized figure fell further, from -1.9% to -2.5%, instead of improving to 1.6% as predicted.
The 10-year Letras narrowed its yields, from 5.202% to 4.917%, in today's €2.435B bond auction. Spain also sold €569M of 3-year debt (from 2.713% to 2.632%) and €2.026B of 5-year debt (from 4.123% to 3.572%). France sold €7B of 10-year debt at 2.1% yield, lower than the previous auction (2.3%).
TD Securities analysts believe the ECB has seen enough to increase its dovishness, “but not enough to cut yet (although we do put odds of a refi rate cut at 30-40%, which is more than is priced into the market)”. “And while we’ve seen disappointing survey data over the last month, that won’t be enough to dissuade the optimists from the story of improvement, and the recent depreciation of EUR will leave the currency as a less pressing concern”, wrote analyst Alvin Pontoh.
German factory orders dropped -1.9% (MoM) in January, instead of rising -0.5% as expected. The annualized figure fell further, from -1.9% to -2.5%, instead of improving to 1.6% as predicted.
The 10-year Letras narrowed its yields, from 5.202% to 4.917%, in today's €2.435B bond auction. Spain also sold €569M of 3-year debt (from 2.713% to 2.632%) and €2.026B of 5-year debt (from 4.123% to 3.572%). France sold €7B of 10-year debt at 2.1% yield, lower than the previous auction (2.3%).