Goldman Sachs made a bold call ahead of the ECB meeting, looking for a 300 pip fall in EURUSD
Well, that's obviously gone a bit pear-shaped so what are they making of that call now ?
Courtesy of our friends at efxnews.com here's their latest update
"The big question after the ECB meeting is whether the ECB is serious about QE,
"That question also arose over the summer, when the volatility in Bund yields raised questions over whether the ECB is willing to stabilize yields in Europe's safe haven asset to encourage portfolio shifts into risk assets.
Today's sell-off in Bund yields and the bounce in EUR/$ rivals those seen in April and May and again puts the question of ECB commitment to QE firmly on the table,"
"From an FX perspective, this matters a great deal, as yesterday's price action shows. The Euro rallied, driven by declining inflation break-evens and rising nominal yields, i.e., rising real yields. This price action has all the hallmarks of the Yen under Governor Shirakawa, as opposed to Governor Kuroda, raising for us the unpleasant possibility that the idiosyncratic Euro weaker story has been compromised.
Even in the unlikely event that yesterday's disappointment was a mistake, we think it has cost enough credibility that the Euro down story we had envisaged is now less likely to play out,"
"We are placing our forecasts under review,"
Lol. Under review aka "We're gonna need to get a bigger rubbish bin"