A really quick preview of the European Central Bank and a few other bits and bobs from HSBC

On Friday, HSBC noted:

  • The EUR is pushing higher against the USD this morning with no ECB speakers to distract and German politics not yet a hindrance

They remark on the ECB:

  • The push above 1.20 in EUR/USD had seen the ECB step up its rhetoric reminding markets that a strong currency would have a dampening effect on inflation and warranted monitoring.

But when there are no ECB speakers on deck:

  • leaving the EUR uninhibited.

On the upcoming meeting this week (Thursday):

  • A Bloomberg survey ... shows 50% of respondents expect the ECB to announce a formal end date for QE at its June meeting (compared to 38% last month) reflects the hawkish shift in market expectations.

On German politics the bank had warned of a

  • "potential modest banana skin lies in wait for EUR bears over the weekend on the political front. Germany's SPD will hold a conference to vote whether the party should enter formal negotiations with the CDU/CSU to form a grand coalition. The EUR rallied recently in response to signs that a coalition was a step closer"

As we know, the coalition talks took another step forward: Germany's Social Democrats back formal coalition talks with Chancellor Merkel