ECB minutes: Look for any discussion on broader financial conditions - ING

ECB minutes will be the focal point for markets today (1330 CET) and once again it’s worth looking out for any comments on Eurozone financial conditions (which implicitly captures the EUR), according to Viraj Patel, Research Analyst at ING.

Key Quotes

“The ECB’s path of least resistance will be a gradual appreciation in the EUR. Our estimates show that the central bank’s ‘pain threshold’ – that is the point at which currency appreciation starts to weigh on the real economy – is a sharp move above 1.25 this side of summer. With policymakers likely to be wary of this – we expect to see fairly neutral ECB rhetoric, at least until they are comfortable to allow markets to price in the next stages of policy normalisation. For us, that’s a summer 2018 story (Sintra Part II) – with EUR/$ moving up to 1.25. For now, broad stability around 1.20 is likely.”