This via the folks at eFX
Nomura FX Strategy Research maintains its bullish view on EUR beyond the ECB meeting this week, arguing that European politics will be less important for EUR trading.
"Political developments in two major periphery countries, Italy and Spain, are the main focus at the moment. Nonetheless, we see three reasons for a less significant EUR reaction than occurred ahead of French election (especially against JPY and USD):
1) apparently much lower EUR sensitivity to peripheral spreads, 2) higher EUR sensitivity to rate spreads and data as the ECB prepares to start policy normalisation, and 3) much smaller exposure to Spanish and Italian bonds outside the euro area," Nomura adds.
"Thus, we recommend maintaining an EUR bullish bias," Nomura concludes.
