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J.P.Morgan Recommend Short EUR/JPY

EURJPY

J.P.Morgan remain “of the view that the EUR should be used as a funding currency given the lack of growth in the region and the ECB positioning itself for rate cuts.”

  • “PMI data for Europe showed further stabilisation but remained uninspiring. The IFO survey also suggested some risks to the downside going forward for Germany.”
  • “Our view is that the slow speed of pass through of rates to the economy of the Eurozone means it’s too early to get excited about greenshoots in European growth.”
  • “EUR/USD is undershooting modestly vs. contemporaneous fair value (at 1.0950-1.10 currently), but the ECB won’t be able to bring about this mean reversion; instead it would need to come from either better regional data or from the US side of the equation. Our preference remains to use euro as a funder given its growth and yield deficits.”
  • As such, they recommended entering a short EUR/JPY trade at 159.67, with a stop loss set at 163.66.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
BulletMarketsForeign Exchange BulletsHomepage

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