ECB easing would favour FI markets - Societe Generale

FXStreet (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale, sees further ECB easing to benefit the FI space rather than FX markets.

Key Quotes

"Easing (non sterilization, negative rates or QE) or threat of it rapidly would push EURUSD mechanically lower by pushing down rates. Negative rates would leave some foreign banks scrambling to reshuffle deposits but ultimately it would just feed the carry trade into the periphery".

"Combine this with incoming Japanese portfolio flows in the new year and you wish you were in fixed income rather than fx."