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24 Apr 2013
Forex Flash: Euro on the back foot - Societe Generale
FXstreet.com (Barcelona) - Alvin Tan, FX Strategist at Societe Generale notes that the Euro on the back foot, after failing to get any lift from both the peripheral bond and broad equity market rallies.
He writes, “(This) Basically tells you that the market is building up expectations of ECB easing in next week's May 2 meeting. The SG economics team does not expect a rate cut from the ECB next week, but discusses other non-standard policy options in this note.” He notes that the European data slide persists and the economic data out of Europe continues to slide, and it is sliding notably worse than US data. He writes, “The deterioration in the German manufacturing and services flash PMIs for April illustrated that weakness was spreading to Germany, and it contrasted against the better-than-expected French.”
He writes, “(This) Basically tells you that the market is building up expectations of ECB easing in next week's May 2 meeting. The SG economics team does not expect a rate cut from the ECB next week, but discusses other non-standard policy options in this note.” He notes that the European data slide persists and the economic data out of Europe continues to slide, and it is sliding notably worse than US data. He writes, “The deterioration in the German manufacturing and services flash PMIs for April illustrated that weakness was spreading to Germany, and it contrasted against the better-than-expected French.”