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Forex Flash: ECB's Draghi to reinforce the overall further shift toward a rate cut – TD Securities

TD Securities analysts believe the ECB has seen enough to increase its dovishness, “but not enough to cut yet (although we do put odds of a refi rate cut at 30-40%, which is more than is priced into the market)”. TD Securities analysts expect today's statement to include downgrades to growth both this year and next and inflation this year could be flat or slightly lower, but the key 2014 inflation forecast will likely be little changed.

“And while we’ve seen disappointing survey data over the last month, that won’t be enough to dissuade the optimists from the story of improvement, and the recent depreciation of EUR will leave the currency as a less pressing concern”, wrote analyst Alvin Pontoh, expecting Draghi to add another reference to a “wide discussion” on rates, in order to reinforce the overall further shift toward a rate cut. “He may even find a way to tweak the risks to inflation to suggest potential downside risks in the future”, Pontoh added.

Forex Flash: Government shutdowns - Nomura

Aichi Amemiya, economist at Nomura note that while Government shutdowns may have limited economic effect but is politically dangerous.
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Spain 5-y Bond Auction down to 3.572% vs 4.123%

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