ECB Policymakers Agree To Look Into EUR Appreciation, Italy's Conte Hands In Resignation

EUR/JPY probed the water under its 50-DMA yesterday, after the moving average limited losses on Monday. A cautious feel weighed on the pair in Asia-Pac hours, but London trade brought steady recovery, as sentiment picked up. The rate knee-jerked lower as BBG reported that ECB policymakers "have agreed to look deeper into the euro's appreciation against the dollar," but resultant selling pressure was short-lived.

• In other ECB news:
• Executive Board member Elderson won lawmakers' approval to become the Vice Chair of the ECB's Supervisory Board.
• Bank of France Gov Villeroy noted that financing conditions are key to monetary policy transmission, stressing the need for the ECB to have room for discretion in deploying crisis fighting tools.
• Bank of Portugal Gov Centeno anticipated that economic recovery will be "strong, challenging."
• Italian PM Conte made good on his promise to resign, hoping for a mandate to form the next government. Pres Mattarella will hold talks with party leaders before picking his nominee for the next PM.
• Bild circulated a report suggesting that German Cll'r Merkel told party colleagues that virus management has "slipped out of control" and tighter restrictions are needed.
• Implied 1-month EUR/JPY volatility has bounced off a multi-month low this morning, last sits at 5.6900.
• Spot EUR/JPY last seen +9 pips at Y126.09. A rally above Jan 22 high of Y126.40 would shift focus to Jan 12 high of Y126.87. On the flip side, a pullback under the 50-DMA at Y125.92 would expose Jan 18 low of Y125.09.
• Coming up in the eurozone today we have French & German consumer confidence gauges as well as comments from ECB's Villeroy & Lane.