The survey

Assiom Forex: for 86% traders no ECB rate cut before June

Despite strong gains in recent months, indices appear likely to consolidate gains or accelerate further

by Corrado Poggi

10 February 2024

3' min read

Key points

Exchange rates: 51% traders see euro/dollar cross stable
Spreads: calm remains, further tightening possible
ECB: for 86% of traders no rate cut before June

3' min read

Stable on current positions to consolidate the gains made in recent months or capable of making further gains in the wake of falling inflation and the first signs of a modest economic recovery. This is the snapshot of the markets taken by the January survey conducted by Assiom Forex among its members in collaboration with Il Sole 24 Ore Radiocor.

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Compared to the previous month, the overall percentage of those who see firm or rising indices in the coming months has risen: 87% compared to 82% a month ago, confirming that for now there are no big clouds on the markets' horizon and despite a record monetary tightening.

Specifically, 44% of Assiom Forex members who took part in the survey bet on new rises in the indices, which for 5% will be in double digits. A month ago, the percentage of rises stood at 46% (with 3% of super-optimists).

More traders see stable markets

On the other hand, the contribution of those who see stable markets, a definition that contemplates a maximum change of 3% in either direction, goes up: in January they are 43%, compared to 36% in December. Conversely, the sample of those who see the risk of declines falls: they are 13% compared to 18% a month ago.

Despite the re-emergence of some fears related to the state of health of US regional banks and the record prices reached by some indices," explains Assiom Forex President Massimo Mocio, "the Fed's implicit reassurances about its ability to intervene immediately seem to comfort traders, who continue to support a bullish view for the time being. In January, the consensus was evenly divided between those who believe that the indices are destined to remain in a trading range that would confirm them at current levels and those who instead believe that the upward thrust is still intact'.

Exchange: 51% traders see euro/dollar cross stable

Euro and dollar are expected to run on parallel tracks over the next few months, keeping their strength substantially stable. According to 51% of traders (up from 47% a month ago), in fact, the cross between the two currencies should remain at current levels also in view of the fact that central banks in both Europe and the US have now completed their tightening manoeuvres and are expected to make their first similar cuts in the coming months.

On the other hand, the percentage of those who see the euro capable of making gains in the month fell from 37% to 31%, which for 2% could be very substantial. On the opposite side, for 18% of traders (from 16%) the euro could weaken against the greenback, continuing a trend that began in recent weeks.

"The pushes in support of the dollar that characterised the first month of the year," explains Assiom Forex president Massimo Mocio, "could give way to a rebalancing of values, which for half of the interviewees would translate into a settling of the single currency around current quotations.

Spreads: serene remains, further tightening possible

Calm reigns on the spread market with the possibility of a further narrowing of the differential between 10-year Btp and Bunds of similar duration.

According to 31% of the traders, in fact, the differential, which currently stands at 156 points, could fall steadily below 150 points, and according to 2%, it could even break through 100 points downwards.

A month ago this scenario was contemplated by only 18% of the traders. As a result, the sample of those who see it still sailing for a long time in the current range between 150 and 200 points narrows to 65% from 79% in December, while a further 4% think it is possible to exceed 200 points.

"No clouds on the horizon on the spread front," explains Assiom Forex president Massimo Mocio, "A stability that is in line with the consensus that sees Italy growing more than Germany in 2024 and in line with other European countries.

ECB: for 86% traders no rate cut before June

The ECB is in no hurry to change the course of its monetary policy and will wait until June before announcing the first interest rate cut.

According to 86% of traders, in fact, the uncertainty of the geopolitical framework and the wait for certain and definitive data on wage increases will induce the ECB to be cautious, while for the remaining 14%, an initial reduction in the cost of money is possible as early as April, given that inflation is falling rapidly and there are no second-cycle effects.

"An overwhelming majority of traders (86%)," comments Assiom Forex president Massimo Mocio, "believe that the uncertainty of the geopolitical situation and the wait for certain and definitive data on wage increases will induce the ECB to be cautious about a decisive change of course that would lead to an initial rate cut as early as spring.

(Il Sole 24 Ore Radiocor)

Corrado PoggiRedattore Radiocor
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Luogo: Milano
Lingue parlate: Inglese, francese e spagnolo
Argomenti: Bce, politica monetaria, società di rating, compagnie farmaceutiche, trasporti e auto
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