EUR: Enjoy the silence – ING

The
Euro
(EUR)
is
enjoying
some
“silence”
on
French
politics,
which
is
making
investors
comfortable
so
far
with
EUR/USD
drifting
slightly
higher
from
the
1.0800-1.0830
anchor,
ING’s
FX
strategist
Francesco
Pesole
notes.

EUR/USD
eyes
1.0900
in
the
short
run

“If
you
read
French
news,
you
would
get
anything
but
a
sense
of
silence,
but
global
markets
inherently
filter
out
noise
to
prioritise
major
developments,
and
so
far
there
have
been
none
on
coalition
talks.
President
Emmanuel
Macron
joined
the
NATO
meeting
leaving
French
parties
from
the
left
working
on
a
strategy
to
secure
key
government
seats.”

“Interestingly,
the
option
of
a
deal
between
Macron’s
party
and
the
moderate
right-wing
Republicans
is
gaining
some
momentum.
Former
prime
minister
Edouard
Philippe
(who
is
part
of
Macron’s
alliance)
is
attempting
to
broker
the
deal.
This would,
however, only
guarantee
a
relative
majority.”

“The
OAT-Bund
10-year
spread
has
been
stabilising
around
65bp,
and
while
we
continue
to
see
a
risk
of
rewidening
as
markets
may
grow
impatient
with
the
political
gridlock,
the
rest
of
this
week
should
see
a
shift
of
focus
towards
US
macro
developments.
As
discussed
above,
the
US
Dollar
may
soften
today
and
EUR/USD
could
eye
1.0900.
The

eurozone
calendar
is
empty.”