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4 Feb 2015
EUR/USD ignores upbeat services PMIs, favouring political developments – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, views EUR/USD might trade comfortably within its wide range, with the market ignoring strong services PMI to favour the ongoing political developments, namely Greece.
Key Quotes
“EUR had a violent session yesterday, rising 2% between its high and low; today it is off its highs entering the NA session down 0.2% from Tuesday’s close.”
“Fundamental data was encouraging with Eurozone services PMI rising to 52.7 and retail sales increasing 0.3%m/m and 2.8%y/y. However the core focus for EUR has been more political in nature, namely Greece.”
“Technically, EURUSD is warning of a build in the current retracement, with resistance at the January 22nd open of 1.1610 (the launch of the ECB’s sovereign QE program).”
“We expect EUR to trade comfortably within its wide and recent range of 1.1098 to 1.1610.”
“Today Greece 10‐year yields are at 9.4%, well off their February 2nd high of 11.4%.”
“The key shift for Greece has been that it has backed away from the demands for write downs and instead raised the potential of a debt swap. Current loans would be swapped into Greek GDP linked debt with maturities extended (potentially into perpetuity) and Greece would shift to a needed reform agenda and focus on a primary surplus.”
“The negotiations ahead are likely to create substantial headline risk for EUR.”
Key Quotes
“EUR had a violent session yesterday, rising 2% between its high and low; today it is off its highs entering the NA session down 0.2% from Tuesday’s close.”
“Fundamental data was encouraging with Eurozone services PMI rising to 52.7 and retail sales increasing 0.3%m/m and 2.8%y/y. However the core focus for EUR has been more political in nature, namely Greece.”
“Technically, EURUSD is warning of a build in the current retracement, with resistance at the January 22nd open of 1.1610 (the launch of the ECB’s sovereign QE program).”
“We expect EUR to trade comfortably within its wide and recent range of 1.1098 to 1.1610.”
“Today Greece 10‐year yields are at 9.4%, well off their February 2nd high of 11.4%.”
“The key shift for Greece has been that it has backed away from the demands for write downs and instead raised the potential of a debt swap. Current loans would be swapped into Greek GDP linked debt with maturities extended (potentially into perpetuity) and Greece would shift to a needed reform agenda and focus on a primary surplus.”
“The negotiations ahead are likely to create substantial headline risk for EUR.”