The firm's chief investment officer, John Woods, spoke to Bloomberg TV earlier

European Central Bank
  • ECB meeting to have a bigger impact on markets than Trump-Kim summit
  • Summit has been discounted to the point where any good news out of it won't be important to market participants
  • ECB speakers' hawkish comments last week hasn't yet been reflected in a meaningful way in terms of risk premia
  • Any announcement that tapering can start earlier than expected can impact markets
  • BOJ likely to keep monetary policy steady this week

Stating the obvious, but at least it hammers home the point that the two key events to really look out for this week will be the Fed and ECB meetings. Personally, I also don't expect much to come from the Trump-Kim summit. This is likely the first of many talks between the two nations so don't expect any dramatic breakthrough on the denuclearisation front.

Anyway, back to the ECB, Woods said that the firm expects the ECB to only taper in December but highlights that growth acceleration in 2H 2018 in the Eurozone will provide support to the EUR and a "repricing of interest rate expectations" will lead to a weaker USD outlook.

That goes in line with what most firms see now, that the EUR/USD is still slated to move higher towards the end of the year.