EUR Fundamentals Remain a Mixed Bag - TDS
Research Team at TDS, suggests that the ECB hopes it delivered its last
bout of easing in March, and will be content to sit on the sidelines for
an extended period of time (rising oil prices will help).
“€80b/m QE kicked off this month and corporate debt buying starts in June. Bank lending is picking up in response to easy policy, and consumers are spending. Event risk remains the key downside risks to the euro area – in particular in Italy (banks) and Greece (debt).
2-way risks should predominate as EUR fundamentals remain a mixed bag. Continued ECB dovishness and spillover risks from the UK referendum are likley to keep a lid on gains. We see scope for better performance ahead, however, on certain crosses (especially vs GBP, AUD, CAD), as relative value strategies may present the best risk/reward opportunities.”