2 Jul 2013
Flash: Europe outlook and a weaker EUR - The Bank of Tokyo-Mitsubishi UFJ, Ltd
FXstreet.com (London) - Research teams at The Bank of Tokyo-Mitsubishi UFJ, Ltd have commented on the week ahead and in general for the EZ.
They said, in another sign of some improvement in financial market conditions, the spreads in periphery bond yields over Germany have narrowed notably in recent days easing concerns over some renewed instability in the euro-zone. Te research teams note that The PMIs in Europe suggested mild recovery lies ahead and Markit (the company that compiles the PMI data) stated that a return to growth in Q3 was now likely. They said that means the ECB may well have to become more active in trying to anchor short-term yields and we note with interest ECB Executive Board Member Coeure’s comment in an interview over the weekend that the ECB was studying “carefully” the idea of the issuance of forward guidance. "We believe action will be taken in order to reduce the risk of a premature rise in yields that could snuff out any emerging sign of recovery – ECB steps would certainly help put downward pressure on the EUR/USD rate over time."
They said, in another sign of some improvement in financial market conditions, the spreads in periphery bond yields over Germany have narrowed notably in recent days easing concerns over some renewed instability in the euro-zone. Te research teams note that The PMIs in Europe suggested mild recovery lies ahead and Markit (the company that compiles the PMI data) stated that a return to growth in Q3 was now likely. They said that means the ECB may well have to become more active in trying to anchor short-term yields and we note with interest ECB Executive Board Member Coeure’s comment in an interview over the weekend that the ECB was studying “carefully” the idea of the issuance of forward guidance. "We believe action will be taken in order to reduce the risk of a premature rise in yields that could snuff out any emerging sign of recovery – ECB steps would certainly help put downward pressure on the EUR/USD rate over time."