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March 16, 2017 By Peter Boockvar

ECB’s Nowotny’s Hint

This story is not really saying anything about the timing of when the ECB will raise its deposit rate from -.40% but it does confirm the story last week that it is being discussed and the ECB will take a different tact than the Fed. This is because much of the corporate financing in Europe takes place via the banks as opposed to the much wider reach of the US capital markets in financing US companies.

Screen Shot 2017-03-16 at 1.31.59 PM

Here is the link to the story: //global.handelsblatt.com/finance/austrian-ecb-council-member-rate-increase-could-be-on-the-way-728696

The German 2 yr note yield closed at -.79%, up 3 bps after the Dutch election results. Watch tomorrow morning for its response to the Nowotny comments.

Here is the intraday chart on the euro in response:

image001(2)

As I mentioned in this week’s Investment Ideas update: (for members only)

As I’m most worried about a rising trend in inflation and a Fed that will very gradually respond with hikes, I’m a seller of the dollar. With the ECB cutting QE in April, I’m a buyer of the euro (FXE). Mario Draghi last week was very dovish but is finally beginning to acknowledge that inflation trends are moving up, the downside risks are basically gone and there is now even a discussion about when negative rates will start going on.

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Filed Under: Central Banks

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About Peter

Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.

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Disclaimer - Peter Boockvar is an independent economist and market strategist. The Boock Report is independently produced by Peter Boockvar. Peter Boockvar is also the Chief Investment Officer of Bleakley Financial Group, LLC a Registered Investment Adviser. The Boock Report and Bleakley Financial Group, LLC are separate entities. Content contained in The Boock Report newsletters should not be construed as investment advice offered by Bleakley Financial Group, LLC or Peter Boockvar. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction or investment strategy. The views expressed in this commentary should not be taken as advice to buy, sell or hold any security. To the extent any of the content published as part of this commentary may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. No chart, graph, or other figure provided should be used to determine which securities to buy or sell. Consult your advisor about what is best for you.

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