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13 Mar 2015
Fixed income outflows from the euro area to accelerate further - Nomura
FXStreet (Bali) - Yujiro Goto, FX Strategist at Nomura, expects fixed income outflows from the euro area to accelerate further owing to fundamental factors.
Key Quotes
"EUR has been trading weakly as the ECB has embarked on its first-ever QE programme. We expect fixed income outflows from the euro area to be a key driver of EUR weakness."
"As we have frequently written, we expect fixed income outflows from the euro area to accelerate further owing to fundamental factors, such as negative yields and a lower home bias."
"In addition, seasonality could weaken fixed income flows into the euro area even further in Q1. Euro area investors’ foreign bond investment could accelerate by about €50bn in Q1 2015 from Q4 2014 because of seasonality."
"As the market likely pays more attention to investment flow data, this seasonality could add to EUR weakness pressures. We continue to recommend trading EUR from the short side, as fixed income outflows from the euro area may accelerate further."
Key Quotes
"EUR has been trading weakly as the ECB has embarked on its first-ever QE programme. We expect fixed income outflows from the euro area to be a key driver of EUR weakness."
"As we have frequently written, we expect fixed income outflows from the euro area to accelerate further owing to fundamental factors, such as negative yields and a lower home bias."
"In addition, seasonality could weaken fixed income flows into the euro area even further in Q1. Euro area investors’ foreign bond investment could accelerate by about €50bn in Q1 2015 from Q4 2014 because of seasonality."
"As the market likely pays more attention to investment flow data, this seasonality could add to EUR weakness pressures. We continue to recommend trading EUR from the short side, as fixed income outflows from the euro area may accelerate further."