FXStreet (Bali) – Nomura FX Strategists note that while the market was disappointed by today’s ECB decision not to deliver concrete details on sovereign QE, the bank still believes about a reckoning delayed to announce a full-blown QE early next year.
“Overall, the ECB meeting was a disappointment today, as there was very little concrete guidance in terms of incremental easing, not even in a contingent and forward-looking fashion.”
“The statement simply stated that “early next year the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price developments.” And this was not sufficiently concrete to move expectations.”
“As expectations were fairly low going into the event, the disappointment today was generally not sufficient to generate any major price moves that said perhaps expectations were a bit too elevated in the equity space heading into the event.”
“We are inclined to stick to EURUSD shorts, as there are still potential catalysts ahead, especially the Fed meeting on December 17. Moreover, the medium-term trend still looks negative to us, especially in the context of the pending incremental ECB easing and the capital flow picture, which is quite negative on the fixed income flow side.”