There is no hurry at all to remove stimulus
- Preferred path is to keep current stimulus in place well into 2023, 2024
- Risks remain skewed towards a weaker scenario
- We are clearly not experiencing a V-shaped recovery
- If there is persistent slack, more monetary stimulus would be appropriate
- I would favour negative rates as the tool in that regard
- Negative rates could be needed later this year or into next year
- No evidence that negative rates have been counterproductive
- If market functioning deteriorates, BOE will not hesitate to add to QE
There's a bit of give and take in his remarks but generally, it will largely depend on how economic conditions develop in the coming months.
Further Development
Analyzing the current trading chart of EUR/USD, I found that the buyers got exhausted today and the downside roattion would be probably to correct strong upside movement from this morning.
Watch for selling opportunities with the downside targets at 1,2105 and 1,2090
Key Levels:
Resistance: 1,2140
Support levels: 1,2105 and 1,2090
