Here's why the comments from the ECB's Rehn last week were so significant

Author: Eamonn Sheridan | Category: Central Banks

ICYMI last week's comments from Rehn, here:

Bank of Finland governor and therefore also a member of the ECB's rate-setting committee, Olli Rehn was writing in the WSJ.

Snippet via UBS, the bank thinks Rehn's words were significant:
  • rightly seen as euro negative, in the sense that he expresses a very clear view that the September package will need to be a big one
  • specifically argues for 'substantial' bond purchases 
  • and that it was important to beat market expectations
Their view is that:
  • EUR will repeatedly get pushed lower ahead of 12 September
  • only after that would the euro have any chance to move substantially higher, possibly once Draghi's departure coincides with the launch of meaningful German fiscal stimulus
While unrelated to Rehn I bolded that German stimulus bit ….. don't dismiss the likelihood of this folks.
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