CMFXFREE MARKET INSIGHTS
The ECB certainly delivered on all fronts at last week’s meeting, although a little underwhelming in some areas. We saw a rate cut, the restarting of QE, the tiered deposit system to mitigate the impact of negative rates on banks, easier terms for targeted long term refinancing operations (TLTROs), and strengthening of its forward guidance.
It certainly appears that the stars are aligning for some EUR strength to come in. First, let start with the market’s high expectations of a dovish ECB. The dovish bar is extremely high for tomorrow’s meeting, and it will likely be difficult for the EUR to sustain dovish moves after the fact barring an over