FXStreet (Delhi) – Derek Halpenny, European Head of GMR at MUFG, notes that the appalling events of Friday evening in Paris are being absorbed by the financial markets this morning with Asian equities lower and the EUR under-performing in the foreign exchange market. Key Quotes “There has been no major upturn in market volatility but no doubt the attacks in Paris will raise further the uncertainty over the outlook for the euro-zone economy. Yields at the short-end of the curve have fallen first thing this morning and there is also likely to be a strengthening of expectations that the ECB will act in easing its monetary stance at its meeting on 3rd December.” “For sure, market participants will be concerned over the medium to longer-term consequences of the attack, particularly if initial reports that some of the terrorists had entered Europe through Greece as part of the flow of migrants fleeing the war in Syria.” “One of the fundamental pillars of Economic and Monetary Union (the free movement of people) is under threat now and a shift to tighter border controls within the euro-zone would certainly be a concern for the outlook for growth. Whether some of these terrorists came into Europe amongst migrants or not, the plan for the attacks appears to have been made in Brussels which will inevitably prompt calls in France for greater border controls, not just over this initial period after the attacks but over the medium to long-term.” “The free movement of goods, services, labour and capital form a key component of the Treaty of Rome in 1957 that established the European Economic Community on 1st January 1958. The war in Syria and the influx of migrants due to the war and now the increased dangers from terrorism will put increasing strain on these four key freedoms that have been fundamental to the EU and the euro-zone ever since.” For more information, read our latest forex news.