Noyer Briefly Weakens Euro
ECB Governing Board member Noyer explained why the ECB chose to give up its senior status in the case of future bond purchases carried out via the OMT. He said this decision was made in the “strong belief that Greece was a unique case and there would not be another restructuring in the euro zone”. EURUSD briefly fell about 30 pips on the headlines, perhaps on fleeting concern over whether the ‘pari passu’ pledge would still hold in the case of a possible future default scenario. The joint press conference by German Chancellor Merkel and Greek Prime Minister Samaras was largely in line with expectations. Samaras pledged to implement reforms and stay in the Eurozone, and Merkel saying she will wait for the Troika report before making a decision on Greece. Samaras noted that the issue of extending the deadlines for Greece was discussed with Merkel but refused to give any further details. BoE Governor King noted that the UK faces a slow and difficult recovery and that output will not return to pre-crisis trend for some time. He added that it may be “justified to aim off” the inflation target under some circumstances, fueling expectations of further QE in November. Ahead today, Nordic countries will be in focus with August industrial production data due in Sweden and September CPI due in Norway.
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