Analysts at Nomura argue that the ECB communications today suggest that the Bank is firmly on track to hike in Q3 next year.
Key Quotes:
“The euro area yields and EUR will be both supported by euro area data into 2019. Negative yields in major euro area bond markets are discouraging foreign bond flows into the euro area, especially from reserve managers, but the flow picture should improve gradually as the timing of ECB hike approaches.”
“The timing of renewed EUR appreciation has been delayed after the introduction of the forward guidance in June, but the mid-term trend of EUR into 2019 is still up, in our view.”
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