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Oct 08 - 02:55 PM

EUR: EU Recovery Fund: Will A Delay Matter? - BofA

By eFXdata  —  Oct 08 - 01:30 PM

Bank of America Global Research flags a scope for a delay in the EU Recovery Fund. 

"Disagreements on rule of law are threatening a delay in the set up of the Recovery Fund (NGEU), initially expected for Jan-21..We discuss the intricacies of the timeline, the political aspects, and implications of a delay for different funding outlooks," BofA notes. 

"A delay shouldn't have major market impact, but one should hedge a scenario where markets think the project will be rejected...In our baseline, which sees EU countries compromise, we like EUR/CZK lower and paying rates in Poland. In case of a breakdown, as EUR/USD will likely be hit, CEE FX will suffer as a consequence, most likely the PLN given it is the most crowded," BofA adds. 

Source:
BofA Global Research

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