Euro Reverses Fire, Theft And Central Bank

The sharp rise of the euro on Thursday evening has seen a sharp rise in the market, which is called "first to kill more and kill the bull".

Roller coaster Market

Just as in December 3rd last year, the easing of the European Central Bank (ECB) unexpectedly fell short of market expectations, causing the euro to rise by 4.3% on the day, from 1.0524 to 1.0981.

Although the European central bank used almost all firepower to increase its easing last night, the euro also rose 3.7% from its lows after a brief decline in the US dollar. Indra Gio said in his speech that the interest rate cut process of the European Central Bank will come to an end.

However, according to the understanding of Johanna Treeck and Martin Baccardax of MNI, a senior editor of the German exchange, "Delagi did not intend to close the door to the rate cut in the future. He also said that" the new situation may change expectations ". He stressed in his own way that the European Central Bank also has enough weapons for future use.

Crazy ECB night's "big winner" is probably not BofA Merrill. Gilles Moec, Ruairi Hourihane and Athanasios Vamvakidis of the bank analyst said in a resolution before the resolution that the euro will bear the downward risk from the European Central Bank's monetary policy conference in March in the very short term after the resolution is announced.

"But if the euro does weaken in the future, we will take a strategic approach and make a profit soon.

Because the continued weakening of the euro needs the Federal Reserve to continue to raise interest rates, and the global risk appetite is also enhanced.

In a report at the end of February, the bank also suggested that "after the short decline of the euro, tactical admission can be done."

For traders, those who had shorted the euro before the resolution, made more German bonds, or opened the two pactions immediately after the resolution just opened, had only experienced less than an hour of short time.

Delagi hints at the bottom of the interest rate (at least the market thinks so), leading to the eurozone.

Collective rise, especially the debt burden of Italy bonds.

German bond prices also quickly rose to a key resistance level, and the yield on the 10 - year treasury bond doubled from 0.157% to 0.333%, the highest level since the beginning of February, resulting in a stampede with the euro. Even before the resolution, investors who had short German bond yields and euro investors began to lose money.

Since the end of February, the euro's exchange rate against the US dollar has been suppressed below 1.100. According to MNI's interview, many traders tend to sell short euros around 1.100 before Thursday, and last night they changed their minds and tended to buy euros in this area.

"I think the euro is hard to fall below 1.1," said a trader interviewed by MNI.

"In view of the persistence of the euro after the ECB expanded, it will increase the attraction of the eurozone stock market and bond market (although the market reaction is not the case at the moment), so the possibility of the euro's falling to the dollar is now very unlikely.

John Higgins, chief marketing economist at Capital Economics, said.

However, Kay's investment is not optimistic about the euro's appreciation too much. The agency believes that the market's expectation of the Fed's monetary policy path is too pigeon now, and the final fact may not be the same.

The agency expects the Federal Reserve to resume again by the end of this year.

The 75 base point, but the interest rate futures pushed back the market expected that the Federal Reserve will only raise interest rates by 15 basis points.

"We see that investors are making up for the short sale because Delagi said he expects no further cuts in interest rates," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

"But I think the euro will still go down when the dust settles, because the ECB's portfolio of policy tools today exceeds market expectations and the market is empty before the European Central Bank meeting today.

It is far less powerful than before last meeting. "

Kit Juckes, an analyst at Societe Generale, expressed surprise at the strength of the euro. The bank believes that the fundamentals do not support the euro's strength, and now there is a good chance to sell the euro.

"The ECB cut interest rates less than we expected, but expanding the size and variety of debt purchases is beyond our expectation," said France. "Therefore, the euro has fallen below the 1.08 psychological barrier against the US dollar, which is not surprising, but the rebound since then has been a surprise to us."

According to faxing bank, the retaliation of the euro has risen more than 300 points after a brief decline, and the pushing force behind it is obviously the rise of short-term interest rates in Europe.

The bank points out that it tends to sell the euro at the current point, causing a sharp departure from the margin implied by the spread.