EUR USD (1.3275) There is yet another Greek moment building up today. Given that the chairman of the Eurogroup Juncker has called a meeting on Greece and the IMF is included, the market is again anticipating some sort of endgame to be played out – after all, reports emanating from Greece suggest that only €300 million in savings are hindering a final close on the €3 billion of spending cuts for 2012. Given that the market is still in thrall of equities and the euro continues to trade with a firm tone, it seems the sense of déjà-vu is well entrenched: investors are letting themselves be drawn into a situation where they somehow feel confident that the Greek deal will be eventually worked out, at least as far as the March 20 bond payments are concerned. Meanwhile as a build-up to today’s much-awaited press conference, news reports are now emerging that the ECB may eventually make concessions on their Greek bond holdings. Analysts are divided whether Mario Draghi will provide any insights into the matter today. In any case, the market is awaiting the ECB’s stance on the new standards for collaterals which will allow banks easier access to funds from the eurozone central banks especially in the context of the second tranche of LTRO due end-February. All in all we reckon that Draghi’s comments today are likely to provide a positive stimulus, at least temporarily, to the euro. Our bullish strategy therefore remains intact with 1.3395 as price target and 1.3090 as risk-limit.
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Deutsche Bank