Tuesday, November 3, 2015

ECB to ease on Dec 3rd? - Deutsche Bank

FXStreet (Guatemala) - Analysts at Deutsche Bank explained that the market focus has shifted to Fed and ECB policy in December. The Fed officials have sense of a mission to normalize policy and hike rates from the 0% level imposed as an emergency measure.

Key Quotes:

"It realizes that if a rate increase comes as a surprise and roils risk markets, the move will not be sustainable. Thus, it has continued to hint at a boost in rates within 2015 despite the recent weakness in US data in order to prevent rate hike expectations from fading."

"Two events that could set the stage for a rate hike at the FOMC meeting on 15- 16 December are Fed Chair Janet Yellen's congressional testimony on 3 December and the release of US payroll figures the following day."

"Yellen has repeatedly suggested the possibility of December rate action, and market expectations may heighten to some extent if US payroll results are not too weak. On the other hand, the ECB is expected to take some easing actions on 3 December."

"If a EUR decline should add to the sense of USD strength and US data should prove steady, the JPY could also be driven downward."

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