Deutsche Bank on yesterday's German court.......>

ECB: Deutsche Bank on yesterday's German court decision:

- DB FX's view on EURUSD has changed from bullish to neutral, revising mid-year

forecast to 1.08 from 1.13. DB notes that BTPs "are now facing additional

headwinds, and the decision further weakens the case for a positive BTP bias". 

- "ECB will be able to offer comprehensible and substantiated arguments for the

proportionality of the PSPP. And though the rulings from the GCC relate to the

PSPP and not to the more recent measures undertaken during the coronavirus

pandemic, including the PEPP...we can expect further challenges to the legality

of the PEPP at some point, particularly given that compared to the PSPP the ECB

issued a waiver on the eligibility criteria and introduced flexibility regarding

the capital key of the national central banks."

- "Overall this shouldn't have a great short-term impact but it makes the longer

term financing of Southern European debt via the ECB more complicated and one

thing we know for sure is that without fiscal burden sharing there is little

doubt that they will need a lot of ECB funding in the years ahead."