EUR Trading Outlook (26-02-2015)

EUR/USD opened NY trade 1.1343 “unch” vs last night’s close, having traded 1.1347/89 overseas. The O/N pop was on a stop hunt, the stall a result of comments from Greek Fin Min Varoufakis who noted debt restructuring discussions will begin immediately. Early attention was on delta hedging EUR 1.1bln 1.1350 and EUR 2.3bln 1.1300 expiries into the NY cut. NYC traded a sedate 1.1336/69 as Janet Yellen completed her semi-annual address to Congress with almost a carbon copy of yesterday’s Senate appearance. 2-Yr yields closed +1bp and 10-Yr yield closed -1bp, reflecting a clarification that a June hike is still possible (at least 2 meetings) Draghi spoke before the EU Parliament, all big picture stuff [ID:nIFR28pwZB] EUR/USD heads to the Sydney hand-off 1.1356. In the final analysis it’s the Fed’s view that it’ll take a long while for inflation to reach target levels that appears to have shifted US long yields/ DXY psychology. Actual shifts in Fed policy have been nuances, markets may have overreacted. German Gfk, unemployment & EZ M3 & var. econ surveys due.