ECB minutes unlikely to weaken the EUR, stay long EURJPY - BNPP

Research Team at BNP Paribas, suggests that the account of the ECB’s March meeting will be published on Thursday and could attract more attention than usual given the wide-ranging package of easing measures announced at the meeting.

Key Quotes

“A key focus will be on the ECB’s apparent reluctance to cut rates further signalled at the press-conference. Overall, we don’t think ECB communication is likely to cause much damage to the EUR and we stay long EURJPY via a restructured options trade recommendation.

Elsewhere, UK construction PMI was unchanged in March. More important for GBP should be the release of UK services PMI on Tuesday, which our economists expect to rise to 54.0 from 52.7. However given the softer manufacturing PMI data the composite index would be consistent with only moderate GDP growth of 0.3% q/q in Q1. Although we believe GBP will recover, this week’s data is unlikely to be the catalyst.”