ECB economist Stark warns there is the risk of a budget crisis in the eurozone due to the continued economic crisis. He calls for the Growth and Stability Pact to retain its importance. He earlier counseled against further stimulus measures. He says the ECB will take back non-standard measures as soon as the economy achieves stabilization.
On the other side of the hawk/dove spectrum is former Fed staffer Orpanides who is now the governor of Malta’s central bank. He says when policy rates are close to zero non-standard measures take on added importance. He also the present level of accommodation is appropriate but that due to uncertainty the ECB needs to remain alert and react appropriately.
EUR/USD consolidating near session highs, having edged up to 1.3633 intraday. Equities are slipping from there highs which could cap EUR/USD near-term.