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Credit Suisse: Sustained positive surprises unlikely in Eurozone economy - eFXnews

FXStreet (Łódź) - The eFXnews team comment that Credit Suisse don't expect the Eurozone economy's performance to surprise to the upside in the next few months.

Key quotes

"'On the fiscal side, despite the exhortations of the EU Commission, ECB chief Draghi and even the German SPD opposition in the form of Asmussen (who together with the ECB’s Couere recently asked for German measures to boost demand), there seems little likelihood of a meaningful thrust from this angle,' CS argues."

"'Those that are inclined in this direction can’t (France and the periphery are belt tightening), and those that have the money (principally Germany) won’t. And while structural reforms can pay longer-term dividends and are showing signs of boosting Spain and Greece, they are unlikely to matter for the timeframe with which we are concerned. This leaves monetary policy – still – as the main lever for action,' CS adds."

"'This leaves open an asymmetric risk that in future the market will lean on the ECB for more direct quantitative easing in the form of government bond buying. This risk of breaking yet another taboo should be worth another leg lower in EURUSD over our forecast horizon, especially as current levels are hard to classify as too cheap,' CS projects."

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