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Oct 05 - 06:55 PM

EUR: 'Everyone Wins If It Falls' - Credit Suisse

By eFXdata  —  Oct 05 - 03:00 PM

Credit Suisse discusses the EUR outlook and maintains a structural bearish bias in the medium-term.

"The ECB’s 8 Jul release of its Strategy Review brought a new commitment to a symmetric 2% inflation target, as well as tolerance of transitory periods where inflation is above target. The market quickly took the message to heart, with euro area 5y5y inflation swaps taking a leg higher on the news, albeit remaining well below the 2% level," CS notes. 

"Still, if the ECB is to generate both higher inflation AND keep rates negative, the EUR will trade at both a real and nominal rate differential disadvantage to the USD. This keeps us structurally bearish," CS adds. 

Credit Suisse Research/Market Commentary


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