ECB eyed this week – Nordea Markets

Nordea Markets analysis team points out that the ECB’s Draghi is about to retire to be replaced by Lagarde and given that ex-IMF Lagarde is a monetary policy newbie, Draghi will likely do “whatever it takes” to pave the way as much as possible, for instance in deciding on a new tiering system.

Key Quotes

“A change in forward guidance is to be expected in July, with additional easing – QE and cuts - announced in September. The market is pricing in roughly a coin-toss of a depo rate cut already in July, meaning that EUR could see some short-term support in the coming week.”

“EUR/USD is supported around 1.12, a break of which could augur a quick move to 1.11. The pair faces resistance at 1.1286.”