EUR: Upward impetus may fade if positive EZ data surprises aren’t sustained - ING

With President Draghi yesterday describing the ECB’s future guidance on policy rates as ‘very important’, it’s clear that officials are very wary of investors front-running the central bank’s next policy moves, suggests Viraj Patel, Research Analyst at ING.

Key Quotes

“Only resilient EZ data could justify any additional ECB policy exuberance being priced into short-term EZ rates and the EUR in the near-term; however, we note that positive EZ data surprises have been less prevalent over Feb (after a pretty impressive Jan). This partly explains the failure of EUR crosses to push higher – in particular EUR/$ failing to cement a move above 1.25. As such, short-term data remains very much in focus – with today seeing EZ consumer and business sentiment indicators and German CPI.”