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Aug 30 - 10:55 AM

EUR: Positive Gas Storage News & Hawkish ECB Offers Support -MUFG

By eFXdata  —  Aug 30 - 09:48 AM

MUFG Research discusses the EUR outlook and sees a scope for some support in the very near-term but maintains a bearish bias over the coming weeks.

"The euro is continuing to trade at around parity against the US dollar where it has found support over the last couple of months. Sentiment towards the euro has improved overnight supported by the Bloomberg report which highlights that the EU is set to meet its gas storage filling goal two months ahead of target," MUFG notes. 

"At the same time, the euro-zone rate market is continuing to price in more active tightening from the ECB to combat upside inflation risks. The yield on the 2-year eurozone bond has jumped higher from an intra-day low on Friday of 0.88% to closer to 1.20% at the start of this week. It follows hawkish comments from ECB officials at Jackson Hole. ECB Governing council member Schnabel emphasized that central banks “should also not pause at the first sign of a potential turn in inflationary pressures” but rather signal a “determination” to bring inflation back to target quickly," MUFG adds. 

Source:
MUFG Research/Market Commentary

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