Goldman Sachs: The Possibility Of Euro Silver Resolution And Its Impact On The Euro

The core expectation of the group of European economists of Goldman Sachs (P) is that the European Central Bank (ECB) will reduce the deposit and main refinancing operations (MRO) interest rates by 15 basis points this week.

Eurobank is not expected to introduce policies such as further quantitative easing (QE) that can dominate the direction of the foreign exchange market. The euro zone is expected to rise to 1.8% level in 2016, up to the level of Euro HICP in March, which is higher than that expected by eurobank.

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"P", but Goldman Sachs also pointed out that the recent discussions on quantitative easing (QE) by European banks did increase, and some officials believe that this measure will eventually be implemented.

Below, Goldman Sachs analyzes all possible circumstances of the European silver resolution: < /p >

< p > < strong > 1., stop SMP purchase debt write off < /strong > /p >

P > Goldman Sachs expects this will reduce the unsecured weighted average overnight rate (EONIA) price of the euro by 6-7 basis points, and the long-term interest rate will rise slightly.

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Goldman Sachs also pointed out that the immediate impact of the measure on the euro / dollar is very limited, about 50 points. P

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< p > < strong > 2. lower deposit and mainly < a href= > //www.sjfzxm.com/news/index_c.asp > financing > /a > operation (MRO) interest rate 15 basis points < /strong > /p >

P, Goldman Sachs believes that the euro / dollar reaction will be more intense.

"We think the euro / dollar will drop in an instant, but the expected decline will not exceed 150-200 points.

Of course, there is uncertainty in this interval. Due to lack of reference from historical examples, the market may have potential asymmetry. "

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< p > < strong > 3. any further a href= "//www.sjfzxm.com/news/index_c.asp" > purchase debt > /a > hints < /strong > /p >

Less than P, Goldman Sachs believes that this situation will become the "change" of the euro / dollar trend.

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P, Goldman Sachs pointed out that the main factor that supports the euro / dollar exchange rate is capital inflow in the stock market and bond market. The only way to prevent this support factor is to overestimate the euro area's stock debt market and make it lose its appeal.

"We believe that the European Central Bank's further quantitative easing will weaken the willingness of overseas funds to flow to the euro area, which will pressure the euro / dollar.

We believe that the purchase of private assets by the European Central Bank, such as the purchase of bank loans, thereby prolonging the time of sovereign debt purchase, will also have a negative impact on the euro.

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Less than P, Goldman Sachs believes that, in a simple sense, only further quantitative easing (QE) will have a serious impact on the euro and reverse its short-term upward trend.

Measures such as stopping SMP's debt cancellation or lowering interest rates on deposits and major refinancing operations (MRO) will not be able to effectively pressurized the euro / US dollar; although the US economic data is good, it can lower the euro.

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Besides P, the bank also said investors should also pay attention to officials' remarks.

If the ECB cuts interest rates on deposits, Mr Draghi says there will be plenty of similar easing measures in the future.

It shows the signal of the euro bank policy being very standardized, which will cause the euro / dollar to go deeper.

On the contrary, the immediate response of the euro / US dollar will be very limited if the measures are considered to be only one-off.

In addition, the interest rate in the euro area affects or exceeds the interest rate of the US dollar, making the impact of Euramerican spreads on the exchange rate limited.

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< p > < strong > 4. < a href= > //www.sjfzxm.com/news/index_c.asp > European Central Bank > /a > nothing. < /strong > /p >

Less than P, Goldman Sachs predicts that the euro / dollar may go up in this case, as the short-term interest rate differentials in Europe and the United States decrease, especially in the 2-5 year interest rate.

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"P > Beijing time on Thursday (April 3rd) 19:45, the European Central Bank will announce interest rate resolutions and hold a news conference at 20:30 20:30.

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< p > Beijing time 9:47 on April 2nd, euro / dollar 1.3800/04.

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